Freelancer Ltd

ASX:FLN

Earnings Call Transcript 2021-Q1

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Hello, and welcome to the Freelancer Limited First Quarter of 2021 Financial Results Presentation. My name is Matt Barrie. I'm the Chief Executive of the group. With me today is the Chief Financial Officer, Neil Katz; the VP of Products, Adam Byrnes; and the VP of Enterprise, Sarah Tang. And after the commentary, you may address questions to any or all of us in the Q&A, pursuant.So thank you for joining us today. We just finished up the first quarter of 2021. This -- we operate in the calendar year, so that's from January to March of this year is our first quarter. And we delivered gross payment volume in the first quarter with an all-time record of USD 192.9 million, which was actually up 39% on the previous year or AUD 249.7 million, up 18.8%. So we're on track to do over $1 billion in payment volume through the bank accounts this year. Our GMV for Freelancer was up 23.6% to USD 25.9 million or AUD 33.6 million, up 5.1% on pcp. The Escrow gross payment volume had a big lift, again, following the last quarter's results, an all-time record of USD 158.2 million, up 43.7% on pcp or $204.8 million, up 23% on pcp. We possibly stand the chance of the Escrow business itself to go over $1 billion this year with growth its having at the moment. The GPV ex-China was an all-time record of USD 151.1 million, up 48.7% on pcp. Our group net cash receipts for the first quarter was an all-time record of USD 12 million, up 32.1% on pcp or AUD 15.6 million, up 12.4% on pcp. The Freelancer cash receipts were an all-time record of $10.1 million, up 31.4% on pcp, or AUD 13.1 million, up 11.8% on pcp. The Escrow cash receipts were an all-time record of USD 1.9 million, up 36% on pcp in U.S. dollars or AUD 2.4 million, up 15.8% on pcp. We obviously had a headwind in the Australian/U.S. dollar exchange rate in the quarter, that was negative 17.4%. We still got fairly decent results even though we had that headwinds. We think that that's obviously got to churn now because we -- in last year, you remember the Austrian dollar dipped down to $0.55 to kind of bounce back up again. And it's been relatively steady in the last number of months. Approximately 72% of the group revenue is in U.S. dollars and 4% in Australian dollars, very much a global business. And U.S. dollars is the main metric we look at. A positive net operating cash flow was $4.2 million. It was a big lift in the first quarter versus $0.47 million in the first quarter of 2020. And we're breakeven in profitability. As I mentioned in the previous quarterly report, Escrow, Freelancer and the group will both individually and together profitable in the second half of 2020. And Escrow was profitable in the first half of 2021, and Freelancer was just slightly under, but we've been kind of dipping in out of profitability over the last number of quarters. In fact, Freelancer was profitable in the Q2 of last year, Q3 of last year and Q4 of last year as the marketplace business. So the jaws of operating leverage are ready to open. We had a reasonable lift in cash and cash equivalents, up 8.2% to $37.8 million. If you look at the Freelancer gross marketplace volume, it's actually growing at the fastest. It's been growing since IPO on a rolling 28-day basis as of 1 day or 2 ago. It was growing at 24.1%. You can see here, this is a multiyear GMV graph for the last 3 years. These plots are actually on a rolling 365-day basis. But you can see its growth is -- has had a big uplift in the last number of months. As I've said before, we're going to work through each of the different revenue lines to get moving at speed and really get the growth happening and some of those efforts are starting to pay off. We're ranked globally fairly high for web traffic. In the end of last quarter, we're about the 1,200th biggest website in the world. As of today, we're about the 565 and continue to rise. We expect that to continue to rise over the next quarter. So we actually get quite a big deal of traffic, web traffic in the year. Last year was up around 100% in terms of page views year-on-year. So -- and we have seen a continuation of this. So we actually think that this number will actually get us into the low hundreds fairly soon. You can see here on the GPV charts for Escrow, another big candle. This follows from the last quarter's results. We had a big uplift of about USD 50 million on a year-on-year basis. And Escrow's GPV actually continues to grow even better than that and as we move into April, but I won't preempt anything from that. So what I might do now is might flip across to the commentary. So I'll just start my screen sharing and reshare another page. So just give me 1 second. Here we go. Is that sharing?

[Adam Byrnes, Vice President of Products & Growth]

There we go.

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

I don't think it's sharing. Is it sharing now?

[Adam Byrnes, Vice President of Products & Growth]

Yes.

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Okay. Great. Okay. So getting down to sort of the segments. So I mentioned before, Freelancer is growing at the fastest pace since IPO. We actually have -- I've charted that down here, where you can see here the GMV growth year-on-year. At the time of the IPO, we're a little bit over 20%. And then as we kind of put a lot of investment into really the paying down technical debt, GMV growth slowed a little bit because we basically had to redivert resources from product development into actual infrastructure work. And in 2019, I have said before, we did kick a few own goals. I'm showing that on the screen? Sorry, 1 second. What screen am I showing? 1 second, meeting controls. Sorry, it's not -- sorry, Zoom is not showing me the meeting controls. Apologies for that. Here we go. I'll share my screen again. Chris, could you give me access, please? Give me access to the admin, so I can share my screen.

[Unknown Executive]

How's that?

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Sorry, it still says, disable the screen sharing. Just make me the admin. Okay, I'll keep talking until the screen sharing is actually enabled. But at the time of the IPO, the GMV growth year-on-year was a little over 20%. At the moment, it's about 24.x%. So the growth -- here we go. Screen sharing is enabled now. Apologies for this. Hopefully, you can see the screen now. As you can see here, the GMV growth has -- is faster than it was at the beginning of IPO. 2019, as I said before, we did kick a few on goals in terms of pushing the new front-end architecture a little bit too quickly. And that did shave off a bunch of GMV, but we'll be working pretty pathologically on each of the bits and pieces where we had incompatibilities with the previous version in terms of features, and we are getting a bit of lift now. One example of this, which I've talked about previously, but I think it's a good example of this is the hourly funnel. So the hourly -- tracked hours now growing about twice as fast as they did in the first quarter of 2019 and the first quarter of 2018, up 23% on pcp. And you can see here in the sticker for that during 2019, we pushed the front-end architecture. We had some features that we're missing really from the hourly funnel. And it really should have been pushed that quickly, but it's a very, very complicated piece to actually get out there because effectively we're rebuilding the entire front end of the website. And you did see that in 2019, there was a slowdown. You can see now in 2020, 2021, that it's growing faster than ever. And that's also replicated with the fee graph we can see there. Again, 2019, we got a bit of operational slowdown due to our own faults. And then 2020, you can see it's growing exponentially again. So that's what we're doing in terms of working through each of the different revenue lines and GMV loans, and we're getting some great results. In terms of supply, we are the largest marketplace in, well, by a long way by a number of users, it's 50 million users, I think 51.4 million as of a few weeks ago. We talked about in the last couple of quarters that we did see a little bit of a drop in the average project size from $216 to $161 in the middle of the COVID. That was due to an influx of a lot of new labor as well as a lot of rookie clients. I did say that it would increase. In the third quarter of last year, it rose to $172. And as of the end of the first quarter, it's now USD 187. So over time, the average completed project size does rise slowly due to the complexity and sophistication of jobs that you can do on the Freelancer. When there are spikes of labor coming in, which has only really happened once before, which is during the global financial crisis, you do see a temporary blip in these numbers, but I do expect them to continue to rise, which will be a contributor to GMV and to revenue. Mobile, I've talked about a number of times over the last number of quarters. I'm pleased to announce that not only have we ripped out the legacy mobile site and replaced it, which we did in the third quarter of last year, but we also have replaced now the iOS app. And in last year, in the second half, I reported that the mobile web fees grew 51.5% on pcp from the second half of 2020 on the second half of 2019. That's -- in the first quarter is now up to 110.6%. So this has paid off. We expect to see a strong rise in the iOS fees similarly to how we did with mobile legacy. It's simply because now we have 1 code base. When we update the desktop website, the entire website is updated at the same -- the entire code base for the mobile sites are updated at the same time. Android is imminent. It's a couple of weeks away. I know I've been saying this for some time, but these are complicated things. But now that iOS is fully out, we expect that to happen really in the next 4 weeks, right? So it really shouldn't be any longer than that, maybe even be sooner than that. But that's the approximate time frame. So we look forward to seeing what will happen with the iOS revenue and see if it's on par with mobile legacy. But it's a pretty strong lift and it's been a great project. And then we've perfectly reduced 4 code bases to 1 code base. So desktop, mobile web, iOS and Android now are all on the same code base. One area that we need to put a little bit of work into is contest. Now as a product, contest is working fantastically well. I mean we're doing contest for NASA. We've got some big ones that have come out now in the USD 300,000 to USD 400,000 range, the biggest contest we've run before. We've run contests for the U.S. Department of Energy, the U.S. Bureau of Reclamation, this is one of the live ones now with 300-something -- USD 365,000. National Institute of Health, it's contest live for USD 475,000. There'll be plenty more coming as part of that $25 million joint tender that we won from NASA. IBM is doing a bunch of things. In fact, they're going to be a great partner. We said -- we added actually last night to the IBM Cloud catalog. So internally at IBM now, globally, people can use Freelancer from IBM staff. Airbus, Novo Nordisk, et cetera. Now the platform is working fantastically well. From a product perspective, 14.5 million contest entries submitted every year. Contest entries in the first quarter were up 52% to 3.82 million entries. There is no other platform in the world as liquid as we are for contests. It's actually amazing, if you haven't used it before, just put $10 in and try to get business card redesign and you've got hundreds of entries. In average, 220 entries get submitted at an average of $88 per contest and the 80% of contests get -- receive an entry in the first hour. Now while contest is working fantastically well from a product perspective, the fees are basically lagging a little bit. And we know why if there's a bunch of upgrades they're missing off the contest platform. When you post a contest, your upgrades are hidden away. Well, before that, just on the post contest page, this is just, again, from the port to the front end, we just basically cut a few corners to get something out a bit live. But we will get this to lift up strongly in the next couple of months because here the content -- in the green line, the number of contest in figure 10 is higher than as it has been before. We just have to get the fee revenue up, which is primarily due to upgrades. The number of contests being completed is way up. You can see there, so the red line in figure 11, we're getting -- more contests are being completed and hand over than ever before and so on. But we need to fix the revenue one. Now over to Enterprise. We've had a decent quarter for Enterprise. Maybe, Sarah, you can take over for a few minutes?

[Sarah Z. Tang, Vice President of Enterprise]

Sure. Can you hear me?

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Certainly can.

[Sarah Z. Tang, Vice President of Enterprise]

Yes. Perfect. Hello, everyone. Enterprise has had a great quarter. We've been growing about 83% year-on-year on pcp. This has been driven mainly by strong execution of key accounts. The average spend of our key accounts has actually increased by 2.5 -- about 2.3x versus the same period last year. More of the organizations that have come out of pilot last year have actually moved through the deployment status and the spend on the platform is increasing. 2 clients whom we did not have last year have actually just recently spent about 6 figures on the platform over the last 4 months. So that's very exciting. We also closed some additional MSAs, including one with a $17 billion global business processes company, outsourcing company. And we -- within the span of 2 weeks have actually engaged 318 Freelance hires. And the speed and ease at which we're able to do that be their internal hiring benchmarks by a landslide. And that's actually opened up the doors for conversations to hire the same type of Freelancers with commitment of about 50,000. So that's looking to be deployed within the next year. Now we also signed a Statement of Work with a Fortune 50 technology business, where we'll be integrating from pre-vetted branded communities into their cloud platform. So this is the one Matt mentioned earlier with IBM, which actually last night, just integrated with their IBM Cloud catalog, which means that IBM customers can actually go through the IBM Cloud catalog when they want to deploy and migrate to the cloud to actually leverage our talent and our Freelancers. And so this was a great way to start testing and improving network effects. Now we're also building a landing page and they're spending additional six figures and that's continuing to grow over the coming months. We also signed -- what we've managed during the last year is really shift from pilot to scaling to a lot of our customers, with many of them actually committing up to $400,000 at a minimum of GMV spend. One of them is actually an IT company leveraging us to manage their contingent workers. Now we realize we're actually the only solution that can actually help these organizations seamlessly build a blended workforce of their entire talent cloud, whether that's through internal and that's leveraging and commercializing the product that we built for Deloitte through MyGigs to manage their internal workforce through their existing contingent labor spend. So throughout bringing your own Freelancer's program and a lot of customers are really liking this program where they can bring their existing Freelancers on to our platform, and we charge less fees than many of our competitors. And finally to then, finding new Freelancers on our platform. So again, under the joint set -- $25 million NASA joint tender that we won, the U.S. Bureau of Reclamation contest value at USD 365,000 that we partner with and was able to win due to our partnership with Arrow Electronics as well as the U.S. National Institute of Health won for USD 474,500 that we partnered with a local data science company, a logistics company, Adiona. They're going well and they're being deployed onto our platform as we speak, and there's additional tenders of coming up that we have a really good chance of obtaining. Now what we really invested this last year that enabled us to start achieving this level of scale is really improving the account representation within our key accounts and streamlining a lot of our internal systems and operating metrics. So this has really been, I think, our efforts within streamlining the operational aspects with these large-scale customers has really shown and demonstrated by the growth in our enterprise GMV. And I think, yes, those paying dividends and actually our GMV is projected to grow faster than what we currently have within the next 6 to 12 months. I'm really excited to announce that we invested heavily on products and release a number of enhancements. One of them was project tracking, talent management and shared payment options, which are super important for large-scale customers. So once we actually get some of these products that refined and features refined, I think, really help us kind of scale these larger customers. Yes. So I think in summary, we're in a really good state, and I'm really confident in the continuous GMV growth, and we've managed to come out of last year being successful at a majority of our pilots and majority of the customers have actually now committed to a much larger spend on our platform. And I'm excited that we're working with Adam and the product team to really build out the scalability of the product so that these customers can manage $1 million of spend at a time on to our platform. So back to you, Matt Barrie.

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Great. Thanks, Sarah. Another exciting thing we did in the quarter was we produced a proof-of-concept app, which is actually live now in the iOS and the Play stores using the Freelancer API. So the API basically lets you access the full functionality of the Freelancer marketplace from your own website app or software. And so really, this allows software really from the first time in history to control units and task them with instructions. And we thought we'll be able to demonstrate it out. For some time, I've said that if you look at Uber, the last time I checked, Uber had 7 million or 8 million drivers. We've got 51 million Freelancers. We probably have more drivers than Uber. In theory, you could build an Uber on top of Freelancer, but the interface at the moment for the website has been built for the general case and not for the specific case of transportation. So in the case of using Freelancer, it's unlikely, you would post a job to pick me up from a certain location and drive me to another location. However, if you actually build a custom interface, which is specialized from people application, we wanted to see what the experience was like. So we thought, let's come up with an Uber for something, and we came up an Uber for photography. So we've built this app. You can download it yourself on the iOS and the Play stores, they're available now. And effectively, it just behaves like Uber. You type in an address, you've got a map of the world. You place your order with a bit of some instructions. And anywhere in the world, photos will be sent back to you within 24 to 48 hours on average. In urban centers, it can be a lot quicker. When I post a job in New York, if provided the sun is up or in Sydney, I've had photos returned as soon as 1.5 hours. And it works anywhere in the world. So some of the locations where I've tried this, I tried it. It worked in Moscow, worked in Budapest, worked in India, worked in Bali, worked in Sydney and New York. It's worked in the remote country side of Wyoming, the remote country side of the United Kingdom. Even Chernobyl, we've got results back within 24 hours. Timbuktu in Mali, with train station to Uzbekistan and so forth. So really, it's a proof-of-concept app. And we think there's a lot of applications for this. For example, if you're a Procter & Gamble, you probably want to check to see your products on the shelves of Walmart and Coles look great. If you are in real estate, perhaps you want photos of houses in a certain location. I've had seen the app being used by a fund manager to get caravan parks looked at. They invest in a bunch of properties around the world. And in fact, some photos just got returned only a few minutes ago in New Zealand for certain caravan park and so on. So it's pretty interesting proof of concept. And the step out from here to actually produce apps that do the equivalent of what multibillion-dollar companies do is actually quite straightforward. So for example, many of you have probably heard of Gojek, that's a multibillion-dollar company in, I think, 4 countries in Asia, where you type in an address of a shop and you tell something to go to that shop and buy something for you and bring it to you, right? That's in 4 countries, yet it's a multibillion dollar company. I mean for us to modify this app to basically allow you to go buy something and bring it to you is only really 1 month or 2 is worth of work. So there's a bunch of crazy things we can do with this. It's an alternative way of expressing the marketplace is more of a niche narrow app. This initially is a proof of concept, you could try it for yourself. In this particular case, it costs USD 35. What happened and you get 5 photos? In fact, in some cases, they send you back dozens. The amazing thing about this is, it's just worked everywhere. And what's happening behind the scenes is when you click place order, it posts a project onto Freelancer with a milestone payment of $30. The app handles all the bidding. So when a Freelancer bids on your project, et cetera, handles the backs and forwards communication, it'll automatically award a certain Freelancer. And then the Freelancer is then tasked to take the photos. And when the photos arrive, you hit the button to review them and then you hit a button to accept them and it pays them to release the milestone. So all it's doing is just using the basic Freelancer marketplace and the API at the back end, nothing special there. It handles the smarts around who to select and what happens if they don't respond back to you and select another Freelancer and so forth. But ultimately, it's a great expression of the power of the platform. And I encourage you to all try it, just download it, trying to get some photos taken, it's pretty amazing what you can get done. So that's about Freelancer. And now I'll probably talk about Escrow for a little bit before I open up to Q&A. So we had another fantastic quarter for Escrow, USD 158 million, up 43.7% on pcp. That was after another big step-up in the last quarter. You can see here in figure 13, these have sort of $50 million GMV absolute number of step-ups in U.S. dollars. So it's serious volume going through this business. Ex-China, it was up 48.7% to USD 151.1 million. And cash receipts were up 36%, USD 1.9 million or AUD 2.4 million, 15.8%. So there's some pretty strong growth in the GPV and that growth is actually faster moving into April than it was in the previous quarter. So it's really moving in a big way. We hit a milestone in the first quarter of USD 5 billion all-time in transaction secured, that's actually cash through the bank accounts. So there's some pretty good volume going through this platform. The growth came from strong sales in digital asset sales. Domain names and so forth, we sold domains such as nft.com and NFTs.com in the quarter, crypto.org and so on. Lots of physical merchandise, that was actually up 87% year-on-year. IPv4 contributed $16 million in the quarter. Last year, I think we did USD 70-something million in IPv4 sales. These are basically IP addresses. And so -- and this, only 2 years ago, it was basically 0. So this is just an example of a segment where we have taken the segment from 0 to possibly this year, $70 million to $100 million in volume in that segment alone. Motor vehicles were up 230% in pcp, contributed about $12 million to GPV. So the number is still fairly low, but are growing fast. eBay Motors made a small contribution to this, but it was not the majority. So we are in a bunch of different car marketplaces in addition to consumers using website directly. We do, as I've said many times before, expect to tip the entire automotive industry. We are the payment system for automotive as our automotive classified sites move towards becoming marketplaces. It might surprise many of you, but the car sites around the world, being classified sites, don't actually know very much about the seller or the buyer. They make an assumption that the car has sold when the listing stops getting renewed. But if you don't take the payment, you don't know if the buyer is reputable or you don't know if the seller is reputable because you don't really collect reputation. It's a big problem for the automotive classified sites globally. We are the solution to that. We're in eBay Motors. We're in Best Car Finder. We're in a bunch of other different car marketplaces out there. In the quarter, we went live with Truck Trailer Tractor (sic) [ TruckTractorTrailer ] in more heavy machinery. We think we will tip the entire automotive marketplace. We think we are in a new position to do that globally, and it's going to take a couple of years, but I think we will get there in a big way. And there's a lot of volume in cars. Escrow Pay is a streamlined version of the checkout experience. You can see a picture there in Slide 14 -- figure 14. We've really put a lot work into making this really like a checkout. The old way, you integrated Escrow, you had to log in, set a password, all sort of stuff and it was a bit clunky. With a lot of feedback from eBay, we streamlined this. So it now looks like a PayPal checkout experience. We're pleased to announce also that, as of last night, we've just put PayPal and there's also a credit card in this checkout experience. So we're in the process of rolling out this new funnel in the next month or 2 to all our partners as well as the main experience using Escrow. So there's going to be some upside from that as well in terms of product improvement. And so it is really quite a slick experience. We also turned on ACH debit in the quarter. ACH debit is a bit like a wire transfer, but it's a bit more immediate. We obviously verify ID and get customer information and so forth at the same time. We've launched it first with eBay. And now it's in the process of being rolled out across all the funnels for all our partners as well as main consumer products. So that's coming up over the next few months. We're in production with eBay Motors and in beta with eBay Watches for a small number of sellers. In the last week, eBay has put a bunch of information up on their website about eBay Watches. And we are imminently, within days, I won't mention which day because these things might just take a bit longer. Sometimes you announce the day, it always kind of blows past a day, but it's within days to maybe a week, we anticipate going in full production with Watches. And if you go to eBay's website in the U.S., you browse around now, Escrow.com as mentioned on many different pages as to how it works and FAQs and so forth. So that marketing materials only just started to go up online. I'll note that eBay, while has tremendous upside for us, not just in the categories, we are in more categories over time, it is not the primary driver for the GPV growth in the last couple of quarters. We do expect that eBay contribution to grow over time. So there's a lot of upside still to come with eBay over and top what we've done already. We've talked about domain name sales, et cetera. We've gone to all sort of marketplaces in the quarter. Just some we pulled out just for interest sake. We added motorcycleshippers. com, TruckTrailerTractor, [ Topmark ], which is a luxury car marketplace, MicroAcquire for M&A. And in addition, we even went into an ostrich marketplace, for instance, the United Ostrich Association, the largest association of ostrich breeders in the United States. So it gives you a spectrum of sort of things that you can sell -- buy and sell with Escrow. And of course, the reason why you want to use Escrow is you want to make sure the ostrich arrives alive, and there's a lot of complication around shipping and so forth. So it's not something you'd use a PayPal to checkout with. The group had net operating cash flow of $4.2 million for the quarter, which is up substantially in the last quarter for pcp, which is $0.47 million. And we ended up with cash and cash equivalents of a big lift, $37.8 million, up 8.2%. Escrow, Freelancer and the group will individually be profitable in the fourth quarter and second half of last year and Escrow was profitable in the first quarter of this year. I mentioned there was a bit of headwind for currency, but we anticipate that to fall back over the next couple of quarters. We also, in the quarter, started trading on OTCQX Best Markets under the ticker FLNCF. And so that's in the U.S., that will increase our ability to be able to have our shareholders, have our investors in the U.S., our customers all around the world and so forth, be able to buy our stock. If you were somewhere like India, for example, you can't trade ASX shares very easily at all, but you can do OTC U.S. stocks. So we think that's going to open up really the ability for people to buy our shares more easily around the world. And so that's -- that was good news. So what I might do now is I might just open it up to the floor for question time. As I said before, you can address your questions to either myself, to Neil Katz, the CFO; to Sarah Tang, VP Enterprise; or Adam Byrnes, who's the VP of Product. So [ Chris ], if we can have the questions, please.

[Unknown Executive]

I'm not seeing many questions in the chat at this point in time.

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

So don't be shy, you can either put it into the chat. Let's see if someone asked a question in a second. On the OTCQX share price. Actually has been trading a little bit higher than the Australian share price, but it closed last night about AUD 0.8364. Surely someone wants to ask a question. Here we go. [ Mick Chin -- Chan ] asks, "Why are you so confident your web rankings dropped to the hundreds?" Well, the number that Alexa shows on the alexa.com website is actually a blended average over the last 90 days. And in fact, if you download the top 1 million websites list for Alexa, it'll tell you the daily ranking. And the daily ranking is substantially better than the 560 ranking that you see on the blended average. So that's why we're confident we'll continue to go into the low hundreds. [ Simon ]. "I'd like to see the share price get over $1, what you think needs to happen to achieve this?"Well, I think the company is just substantially undervalued. I mean if you look at the -- globally, you look at peers, you look at the recent IPO that happened in Australia. I mean this year, we'll do about $1 billion in GPV, in the Australian local equivalent, that's only in Australia. And a very spotted exposure in overseas is doing $30 million of GMV and that $30 million of GMV includes chargebacks, refunds, cancellations, sales tax, right? And they've got a valuation higher than us. So I think the share price is going to be substantially higher than this very soon. We've got the -- getting the growth going. I think Escrow in itself is probably worth more than the current market cap of the company. There's BizPay -- I just got an e-mail this morning, BizPay is listing in Australia. It's got a monthly payment volume of $7 million and they're valuing the company on 1.5 to 2x payment volume for $400 million market cap, and we're doing USD 180 million volume per quarter, right? So we've completely [ blew all ] the water, [indiscernible] pay in terms of volume by far and got phenomenal growth in that business. So I think the market cap of Escrow, well, is probably worth more than the market capital [ synergy ] right now. So I think it's continued execution, continued results from the numbers. And I think there'll be a bit of wake up in the market. We've been a little bit unloved for a little while, but I think that's going to change pretty rapidly. [ Mick Chan ] says, "What's driving the improvement in the ranks?" Simply web traffic. Web traffic relative to everyone else's web traffic. We've heard -- everyone's working online. We have -- the new front-end architecture is performing very well. It's a lot more responsive, a lot quicker. We have made a number of permits to speed on the site. And also just improving the products as a whole. So it's -- I mean, if you look across all the metrics, you look at time being spent on sites, page views and bounce rate, all those metrics are going in the right direction. So people using the site more, there's more people going to the site and they stay out for longer. "Do you think eBay" -- a question from [ Aaron ], "eBay, integrate beyond Watches than Motors?"The answer is yes. We're in discussions with a number of other categories right now. Nothing is committed as yet, but there's been at least 3 or 4 other categories that we are in discussions with. But we'll have to wait and see on that. I mean you can understand that eBay and other marketplaces have a big problem with fraud, right? So if you thought traditionally, why would you buy a watch from eBay? Yes, well, I guess, you get the notion you had back that it's going to be cheap, but are you worried about it being a stolen watch, or a fraudulent, or a counterfeit watch or what have you. And that's why there's been an emergence of a bunch of these different watch marketplaces like Chrono24, WatchPayer, Watchbuyer, et cetera, which have kind of picked the eyes out of eBay. eBay has decided to drop a hammer on that and to ensure there is no fraud. And to do that, there's a combination of the authenticity guarantee, which means that no longer will a seller be able to send a watch to the buyer, it will have to go to a third-party authenticity network or authenticated network -- where this is not us, this is just a network that set up the sales of third-party authenticators. They get the watch, they clean it, they open it, they check all the parts. They make sure it's all authentic. They then close it up, put a sticker on it, give you a certificate and put it in a nice little box if it doesn't come with the original box, right? Then the watch gets shipped to you, the buyer. And only then do you release the funds after you've seen it all and a third-party authenticator has verified that everything is authentic, and it's all great. And then you release the money, right? So you can understand that, that kills fraud. I mean that drops the hammer on fraud. And there's a bunch of sections where eBay has big problems with counterfeits and so forth. And so if we're in Watches and we're in Cars, I think it's safe to assume we'll be in other areas, and we're in discussions and something might be coming in the future. But there's nothing committed at this point, but I think it's a reasonable assumption that we will be into future areas of eBay as well as other similar marketplaces. Next question is, "Any comment on Shopify using Escrow?" Yes, they're using us for Shopify Exchange which is of buying and selling the Shopify shops. I have told the sales team, I would love to see soon rolling out in Shopify more generally. We have got literally 50 to 100 e-mails from people saying, "Can you please put Escrow on in Shopify?" There are a number of categories that Shopify has a problem, such as electronics and so forth, where a lot of fraud happens. I'm confident, at some point, we will be turned on the Shopify, but there's nothing happening at this point right now, but it is one of the top missions I've told the sales team to try and expand that relationship. They've just been very, very busy with some bigger fry at the moment, and we are expanding the sales team to get more bandwidth. Next question is, "Do you think Freelancer Enterprise can sell the same store in Infosys and TCS?" Well, what I will say is one of those names is one of our customers in Enterprise. So we are helping power one of those businesses at. And the demand from them, they've told us is, well, they've got some reasonable numbers in terms of what they want in terms of staffing. So we are actually helping one of those names actually grow. And I'm not sure, Sarah, if the second one is actually there as well -- is one of the competitors, but I'm not sure which it is. Maybe Sarah can talk about it later on. "Would a demerger of Escrow be beneficial to realized value?"Look, at some point in the future, and I've said this before, Escrow should be its own independent public company. And there's a reason why because it's a financial services business, you need to be able to have audit set of accounts that are publicly available that you can download because, globally, as you go to banks and open bank accounts and so forth and you're dealing with so many regulators, I think we regulated down 50 or so different jurisdictions. You just -- you need to have it independently audited and run like a financial institution. At that point in time, we would still retain management control and probably the majority of the shares in the company. But at some point, it will IPO. The question is, when is a good timing? When we IPO-ed, Freelancer, it was doing about $18 million of forward revenue, et cetera. And it IPO-ed at about $200 million market cap, opened in the first [indiscernible], USD 1.1 billion, et cetera. The question is, what size and shape should Escrow look like to IPO it? At the moment, it will look next year, if it continues to grow at the current rate, very similar to Freelancer in terms of both the size of revenue and the growth rate that they did when we IPO-ed Freelancer. The question is, when would be a good time to do something like that? Or should we do a private raise first or what have you? There's a lot of optionality. Obviously, the markets are hot at the moment. You're seeing companies IPO at substantially higher values with very little revenue to no revenue. I think that it would attract a very strong valuation at this point in time. So if somebody considers -- certainly, the optionality around the corporate activity with Escrow is increasing. So -- and we have had some interest in that. So we'll kind of see where that goes. Now that you're on to -- from [ Aaron ], "Now that you're on OTC, is the goal to go on to NASDAQ Small Cap or NASDAQ [ Main ] Exchange?"There's no plans to do that at this point, but it's probably something [ we've thought ] about for a long time. [ Wyman ]. "Would you partially for Escrow?" I've just answered that.The answer is yes, at the appropriate time, we're not sure when. [ James ] says, "How do you think about Escrow's take rate over time, say, over 5 years?" The take rate has been coming down a little bit. So 2 years ago, it was about 1.45%. Now it's about 1.2%. Some of that's come down because we're doing some larger transactions now. So some of the larger transactions are obviously the [ skinnier ] percentage. Really the transactions range from about -- well, the corporate transactions, commercial transactions with Escrow, it's about 89 basis points. That can go down to about 30, 35 basis points for something like an aircraft. For consumer, the RAC rate is 3.25% going up to 6%, if you use a reversal thing like a credit card. There's 2 things that have kind of driven the take rate down a little bit. One is these large size transactions are going through in the tens of millions of dollars -- $10 million plus. The other is some of the partner transactions we're doing is -- we're doing a bit skinner because it's the likes of eBay and so forth. So there are some ways we can lift this take rate. For example, if we started doing FX, some percentage of our volume, for example, is a U.S. dollar transaction where the seller gets paid out in euros, right? At the moment, we're kind of giving up those FX fees to some other international institution. There are things like that where that would actually substantially lift the take rate. Also in some categories, we do offer value-add services. So for example, in cars, we do title collection. So in the U.S., when you sell a car, you got to collect the titles and so forth. We do lienholder payoff, we do lease swap arrangements, et cetera. So there are some value-add services where we could lift that. We haven't really been focusing on that. But there has been some interest, for example, likes of eBay to add some of those value-added services that are specialized into those niches. So at the moment, it has been getting a little bit skinnier with a big lift in volume, but I think there is some possibility to lift it. We just have to get the bandwidth up to do that. "Group GPV in first quarter of '21 was $192.9 million and fourth quarter was $191.8 million, so it's not significant quarter-on-quarter."No. But [ Richard ], if you go back to the fourth quarter, you'll see that the $50 million lift in that GPV number, right? So if you look at the Escrow numbers for the fourth quarter, there was a massive lift in that fourth quarter. And so well, quarter-on-quarter, the lift is small. Year-on-year, the lift is massive, right? So I think that's probably the wrong way of looking at it, and as I said before, it's going a bit faster now anyway. So -- for Escrow and also for Freelancer. So there is seasonality in quarter-on-quarter as you look at the numbers, but the seasonality is messed up a little bit by COVID, right? Because the seasonality you have, typically, is Easter is usually negative, in August usually negative, which is summer holidays in the U.S., North America and then you've got a bit around New Year's Eve, et cetera, and a little bit of Diwali and Ramadan and so forth. But a lot of these seasonality numbers aren't behaving like that at all because people are in lockdown, their kind of -- their habits have changed a little bit. "Will we get a BNPL option in 2021 for Freelancer?"We have thought about it actually. We've had numerous discussions with all the BNPL guys. It's on the list of things to do. It's not on the immediate plans next month or 2, but it is actually on the list to potentially turn that on. [ Kevin Chang ] says, "What's your view on the Freelancer market growth during COVID and post-COVID?"I think we've got a permanent step change. I don't think the world will go back to fully working back in an office. I think we're some years away from COVID being solved. I don't think the vaccine solution right now is going to be the be-all-and-all solution. You've got a number of strains now like the B.1.167 which has got antigenic drift, which means its resistance to many of the vaccines. You've got those breakouts happening in India, where it's -- the cases are growing by 10% per day. I think it's like 275 million -- 275,000 cases yesterday, up from 230,000 2 days ago. So I think we're some way away from solving the COVID problem. And I think even if COVID magically went away tomorrow, you don't have to run, just go back to the office. I think people like having a hybrid. I don't think people will be fully remote, but I don't think still be fully back in the office. So I think it's going to be mixed. And certainly, Pandora's box opens, once you try to use our website and you discover how easy is to find people, how easy is to match resources, and how inexpensive it is, I think there's no going back, so.There's a question from [ Kevin Chang ]. "What's your view on the Freelancer market --" sorry, from [ Ray ], sorry, "Does the lack of share liquidity contribute to the undervalue of the company?" I don't think so, right? I think it contributes to volatility, certainly. So the share price either goes up a lot or down a lot, depending on the buy-sell sort of activity. But it also critically help us, right? So there's a bit of momentum that the share price moves pretty quickly up. So it is a volatile stock because it is low in terms of liquidity, but I think ultimately, it's going to be quite beneficial to us as we continue to print great results. I've answered [ Simon's ] question previously. [ Mick Chan ], "Given the slow pace to correct the issues in 2019, do you need to spend more in engineering so future issues correct faster? What do you think your income or cash flow should be [indiscernible] the best returns?" Good question. Look, we went through a very complicated architectural change in 2019. We replaced -- I mean, Adam, maybe you can talk about this in a second. We replaced the entire front-end architecture. And we are page by page, by page effectively redoing the website. We did that because the previous architecture was based on 4 front-end stacks. It was very slow to load. Google increasingly is penalizing slow-loading websites. The user experience is not great when its slow to load. And we've got to a point -- it's around 2017, where we said, yes, we need to do something radically here to bring it up to Facebook level in terms of performance. What do we do? And we spent a long time architecting a solution and then we implemented it now. The issue is it's a very complicated site, right? I mean you might think it's just a site for posting jobs, but effectively, it's a country and software, and you have intelligent participants on both sides. So it's not like selling books, you've got -- it's just a very, very complicated site to actually manage. And when we went out in 2019 and we pushed -- started pushing some of these pages, we started with the most important pages first. Those -- really, the problem was that we -- the product managers didn't have a perfect understanding of all the edge cases on those pages. And we did push, say for example, the project view page too early. And you can see that in the hourly graphs how, in 2019, kind of -- the growth has kind of stopped because a lot of the features, the edge case features around hourly about how it works were not fully implemented. Now we -- obviously, as a result of that, that affected the share price, and we're acutely aware of this. In hindsight, we probably sort of spend some more time really on the CI and the test suites and the QA. We put a lot of effort at the same -- we're putting a lot of it at the same time into the QA. We hired literally a new person to run it who wrote the textbook on software quality assurance, speaks at conferences and a professor at a university, ex-Dolby. So we do -- we were putting a lot of effort in parallel. We -- being a business that's not massively cash burning, we are constrained by our revenue in terms of the resources we allocate. I am not of the belief of going deeply cash flow negative in this business and losing tens of millions of dollars a year just to kind of get growth trading for -- at all costs. I'm of the belief that you should reinvest everything and just trying to breakeven, maybe marginally grow profit from here over time. I do think the jaws operating leverage are really poised to open now. You can see what the cash flow of last year with $7.8 million in the cash flow of the first quarter. This year, $4.7 million. The cash is coming in, right, in a big way. And it won't take much to get those jaws wide open. Now second part of the question is a great question, where were [indiscernible] cash flow go? Primarily, if you look at our business, there's no CapEx, it's basically OpEx and it goes into headcount, rent and marketing. And marketing, we want to generate return quickly on the marketing. We're not -- a Silicon Valley company is spending 200% of revenue on marketing. We are constantly trying new things, constantly inventing. We've actually made some big improvements to reduce our cost for acquisition per customer in terms of how we've targeted our paid advertising. Now you got to remember, most of our traffic is not through paid advertising, right? So 66% of all projects at any point in time are from repeat customers. Of the 33% roughly that come from new customers, marginal of that comes from paid, right? Instead, comes things like SEO, that comes from just referrals, inbuilt virality in the product and so forth. There is some paid. There's some paid in the form of Google AdWords and so forth. And there's also some paid in the form of virality, Give-Get, I get $20, you get $20 if you refer someone. I think there will be a step up in marketing, but not a lot because we have parameters in terms of general return. The rest will go into headcount, but you can't hire. Yes, it doesn't take much from here. I mean if you got a 20% growth, it's a pretty modest growth in revenue numbers of the business. That's a big step-up in terms of numbers drop in the bottom line, unless you put it into hiring and you really can't hire that fast. So in terms of organic, it will be going to headcount. But we're going to have some cash left over, I think, pretty quickly. [ Zane ] had a question, "Freelancer is not really mentioned here. Anything happened here?"The answer is yes. And real soon, we'll be talking about something there. But I don't want to preempt that right now. But yes, stay tuned to something there, a reasonable size. Next question from [ Adrian Lee ]. "What is the position on moving marketing spend to online rather physical marketing on buses? It seems like the poster hasn't changed in years."We spend nothing offline really. You've seen the -- I mean you saw the buses in Australia, we've got them -- they were distressed inventory because COVID wiped out what have you. I mean, [ Adrian ], 4% of our revenue comes from Australia, 4%, right? The rest of it comes to the U.S. So the vast majority of our marketing spend, right, in 7 digits a month is global, and it's mainly in the U.S. right? So the stuff you saw in Australia was de minimis distressed inventory, right? So the bulk of the marketing is -- I mean, physical marketing is less than 1% of our marketing spend. It's tiny, right? On an ongoing basis, tiny. [ Shiv ], "Anymore acquisitions on the horizon?"Look, we're always looking for things but nothing has happened in the last number of months. So yes, I won't talk to that. "Has escrow" -- from [ Trevor ], "approached Autotrader or Carvana as clients?" I don't know Carvana. Autotrader, the answer is yes. There are 3 Autotraders, there's U.K., U.S. and Canada. We are well advanced with one of them, and we have the other one pipeline in deep conversations. They are 3 separately run businesses, believe it or not, even at the same name. But yes, we are well, well, well down track with one. In fact, I wish I could have been -- said something about that 6 months ago. But yes, we will get Autotrader, don't worry about that. [ Adrian Lee ], "What are the growth levers for Escrow in the next few years?" eBay is a major one that will grow, but just to keep out further growth. There's a number of key verticals we're basically attacking. There's about 8 of them which are key for us. The domain names and IP addresses, there are automotive cars, boats, airplanes. There is fine art, sculptures and so forth, gemstones, diamonds. There is import/export, et cetera. So there are a number of these key verticals that we are working on, and we're building out basically sales. We're building out account managers and [ ADRs ], et cetera, to go pursue them. In addition to these product improvements, really making products super slick, it's a unique experience. I mean, you've got to remember that if you look out there, there's not really many other Escrow companies in the world. The ones that operate have like 1 license and they're operating illegally. You got to remember, Airbnb got a letter from the California Department of Business Oversight saying that, you hold money for the provision of a service being -- staying in a vacation rental and you need to get Escrow license. Now Airbnb could go and get an Escrow license, they haven't. But if they get extra license in California, they need one in Texas, Arizona, North Carolina, Alabama, Hawaii, New York, et cetera. So the question will be, do they really want to spend a decade chasing these licenses and all the compliance overhead that goes with that? Or they'll pay us instead.So increasing of the regulators are forming a view that marketplaces will no longer be able to take payments and you need to put them through an Escrow provider, and we have the global online Escrow provider. So I think it is an extremely strategic asset for any marketplace business in the future, particularly services-based marketplaces where you're holding a payment for the provision of the service where regulators are forming a view that that is Escrow. The question is, "What are the margins of Photo Anywhere?" As I said, it's actually higher. So it's USD 35 at the moment for the basic products to get 5 photos. Of that $5 is taken as a Photo Anywhere fee, and that's posed to the marketplace with a $30 milestone where the normal fees apply, which is 3% plus 10%. So the margins are a bit higher for the Photo Anywhere. We are going to put into the product, take a video, which will be a higher priced. We'll add in a checklist. So if someone can go to a location, do a checklist, take photos or video and there'll be other things later on going to that. Okay. It's been a good set questions. Any other questions from anyone else? Adam, did you want to say anything about the product at this point [indiscernible] you've got questions?

[Adam Byrnes, Vice President of Products & Growth]

Well, you've covered quite a lot. Whilst, I mean, the big, I guess, headline release of the quarter was the iOS release and Android will be following very soon. And it's -- I haven't got anymore words than other major release. Well, look, like I said, I think you've largely covered most of the major product announcements.

[Robert Matthew Barrie, Founder, Executive Chairman & CEO]

Okay. Great. So I'll open up for a few more minutes just to see if anyone's ask questions or call to close this. As always, you're free to organize one on ones with us or the management team or do a call at any point in time or come visit.[ Peter ]. Question, "The update on Freelancer growth appears to have a lot of potential given the current delivery supply side disruption." Well, there's a bunch of stuff we're going to talk about soon with this business. Probably in the next 8 weeks, they'll be, I think, talk about this. I think there's a lot of potential. The average project size in Freelancer is at $4,500, it's about 25x larger than Freelancer. It is primarily at the moment an Australian business. We do plan on taking it global. So there's a lot to say, but not right now about this business. Any other questions? Okay. Well, my call to a close then. Thank you very much for attending the first quarter of '21 financial results presentation, and I look forward to speaking to you, if not in between then, in a one-on-one next quarter's results. So thank you.