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Okay. So welcome all to our Airtasker's FY '22 Annual Results Presentation. I'm going to be running through our investor presentation over the next few minutes. If you do have any questions, please use the Q&A function and we'll get to the questions at the end of the presentation. My name is Tim Fung. I'm the cofounder and the CEO here at Airtasker.
Hello, I'm Nathan Chadwick, CFO of Airtasker.
And I'm Mark Simpson, General Counsel & Company Secretary.
Thanks, Nathan. Thanks, Mark. So Airtasker is Australia's #1 marketplace for local services. In really simple terms, we connect people who need work done with people who want to work. We are bringing e-commerce to the local services marketplace. And we believe this is a massive opportunity because if you look at the way that physical products are sold through e-commerce, there are these incredibly seamless experiences through platforms like Amazon, Alibaba and Kogan. But if you have a look at the services economy, it's absolutely still stuck in the ice age. People still asking friends, going to the classifieds, going to these lead generation platforms. And it's just really difficult. In fact it's so difficult that most people just don't participate at all. We believe that there's a huge opportunity in e-commerce for local services. At Airtasker, our mission is to empower people to realize the full value of their skills. What this means is that creating jobs on Airtasker isn't the byproduct of the work that we do. It's actually our core purpose. We're at the forefront of the flexible working movement. 7.1% of Australians used a platform like Airtasker to find flexible work over the previous 12 months. And of those people, 34.8% of them chose to use Airtasker, which makes Airtasker the most widely used platform for flexible work in Australia. The way that we create these flexible jobs is through our open and infinitely horizontal marketplace. Creating an open marketplace means that we don't use manual operations because we empower our users through a system of transparency and accountability to drive high-quality experiences at scale. Secondly, we're infinitely horizontal. So there's not just one category on Airtasker or a few service categories. Customers can literally ask for any service that they need done. Whilst anyone niche can seem really small on Airtasker, whether it's getting a drone out of a tree or having a Star Wars-themed wedding and organizing storm troopers through Airtasker. These niches can seem small, but the aggregate of all of these different niches that don't fit into any traditional service category is absolutely enormous. And we believe that this flexible work that we're creating through our marketplace is really relevant right now. During this period in which there's high inflation and increased cost of living, people really need to find ways to be able to earn additional income. Furthermore, with economic uncertainty, flexible work represents a great way for people to be able to come out of working in full-time jobs if they're made redundant or if they're furloughed from their work, but it also has a way of easing people back in to full-time jobs when they're ready for that. So this flexible work actually creates some additional opportunity for people to be able to navigate these challenging times. In line with our mission, over the past years, Airtasker has invested significantly into building relationships with the labor government and other regulators and unions. And really what we've done here is make sure that Airtasker -- people are aware that Airtasker is very differentiated from other ridesharing and food delivery companies, which characterize the gig economy. On Airtasker, the customer and the tasker determine the price and the scope of the work that they do. And really Airtasker represents independent contracting in its most pure form. So staying open, being proactive and dealing with government and regulators has been really an important investment for us, and we think that it's put us in a strong position with the changing government. So a little bit about Airtasker's marketplace business model. Our open, infinitely horizontal marketplace drives organic customer acquisition and strong unit economics. So first of all, this chart on the left here. As liquidity in our marketplace grows, we generate more and more user reviews on our platform because every task that's completed generates about 1.8 user reviews. We now have more than 5 million reviews on the platform, which makes the reputation passport of each of our users really, really powerful. What this means is that our marketplace is more sticky and represents a really, really strong defensive moat and competitive advantage for our business. We should call out here that the metrics on this page are Airtasker only and the addition of Oneflare, which we're going to talk a little bit about later on, adds considerably more liquidity to this -- to the platform on top of the stats that are presented here. So if we look at that sort of cumulative network effect advantage that we've built, this enables us to acquire and retain customers in a really, really efficient way. So in FY '22, we had over 427,000 unique paying customers. And of this, 63% of our customers are simply returning customers, coming back for their second third or more tasks. Then of those new customers that we acquired, more than 80% of those came from organic channels, like SEO, Organic Social and PR. We didn't have to pay for those users, and we have a very low overall reliance on paid marketing. So putting these 2 things together, this organic customer acquisition was then coupled with super strong unit economics. So our average task price, that's the average price of an individual transaction on Airtasker grew year-on-year to $237 average in FY '22. We then earned a steady take rate of between 16% to 17% off each of those tasks in FY '22, that was 16.6%. And we have a gross margin of that revenue of about 93%. The only costs that come out of that revenue are about 5%, which goes to our payments costs at about 2%, which goes to public liability insurance costs. As we gather more data and we build scale, these costs are actually coming down. So what you can see in this model is that we benefit from the upside of inflation on the cost of services as the average task price goes up, but the average cost of goods sold is actually mostly untethered to inflation. As such, we believe we could benefit in an inflationary environment, and we could even be an inflation winner. Given the COVID lockdowns in Q1 and Q2 of FY '22, we believe that Q4 of FY '22 best represents the underlying trajectory of our business. During this quarter, our GMV was up about 38% on pcp to $54.4 million. Calling out here that this was about 0.5% below our guidance of about $191 million. And of course we hoped that this number would be higher, but we're very happy with these results given the enormous headwinds that we faced in FY '22, not the least of which was a quarter long COVID lockdown across the entirety of Australia. During this period, our revenue was also up 31% on pcp to $9 million. This included about 5 weeks of revenue contribution from the acquisition of Oneflare. That business is performing ahead of expectations. And we do expect to see the full contribution of the Oneflare revenue roll through in the coming quarters. Given our Oneflare's subscription revenue model is being layered on top of Airtasker's pace, you've got a take rate model. We'll focus primarily on revenue as the key metric as we move into FY '23 and beyond. During the quarter, international GMV run rate also reached $9.5 million in May 2022 and $8.9 million in June 2022. This was up more than 112% on pcp and was towards the top end of our guidance of $8 million to $10 million run rate that we provided. Going a little bit deeper on our progress in the United States. A reminder, in the United States, we're in the 0 to 1 phase of building a marketplace. And during this phase, we focus on generating a consistent flow of customer demand, which is measured in posted tasks. So how are we going over here? We hired a general manager in the United States, [ Ken Swanson ] who is [ ex-Postmates, Mobike and Lime ] and has incredible experience in launching new local marketplaces all across the world. He has just hit the ground running and actually was in Australia last week, total rock star, really excited to have him on board. During this quarter, posted tasks, our key measure, increased about 49% quarter-on-quarter, and that was up more than 3% -- 3x, sorry, on the same time in the prior year. What we're also really excited to see is that the supply flow we all have started spinning too. So demand has gone up, as you can see, 49% quarter-on-quarter. But the supply flywheel, the engaged task is also starting to organically build up, and that increased to about 11,000 offers being made by taskers in that same quarter. So what is our strategy in the U.S.? Our strategy in the U.S. is to leverage our unique ability to go after the long tail of services. What we mean by the long tail of services, which we've spoken about a lot, all of those tasks that don't fit into any specific category like removing a spider from your home or getting a drone out of a tree. The reason why we go after this long tail of services is because in this space, competitors, our conventional or traditional competitors like Angie's List or HomeAdvisor or Thumbtack in the United States or Checkatrade in the U.K. can't attack this space because their model is built on existing businesses and existing verticals. They have to deal with suppliers who don't offer these kinds of services. This long-tail approach is really counterintuitive to most people as no individual service within the long tail appears worthwhile. But in aggregate, the sum of all of these services that don't fit within any one particular vertical is absolutely enormous. So by pursuing this long-tailed strategy, we're addressing this really, really large total addressable market, but we're avoiding competition, and we can build liquidity outside of these big categories before we go and attack the main categories like cleaning, gardening and moving homes. In the U.S., we continue to see really strong organic growth outside of our initial focus cities of Miami, Atlanta, Dallas and Kansas City. And you can see here on the left-hand side, this organic overflow growth is being driven primarily by SEO, PR and organic social. You can see that there in the blue bars. It's just really similar to the overflow effect that we saw in Australia with Melbourne, Brisbane and Perth, all going off the back of a key focus on the Sydney market. This is also being driven by long tail strategy, which is generating a lot of PR-able moments for us. So for example, we're seeing things like lining up for the passport queue or storm trooper weddings, are really driving a lot of PR and organic social activity. So given the massive nationwide service area that we have in the U.S. combined with this overflow of our posted tasks happening outside of our key cities, we're going to be focusing our capital on a market that can drive greater SEO, PR and organic social activity through things like influencers and brand partnerships. So we debated whether we would focus our efforts into the New York market or to the L.A. market. And we've elected to push into the L.A. market really with a full focus of our capital. The reason for that is there's less seasonality in the Los Angeles market, there's a greater degree of homeownership and there's greater access to brands and celebrity partnerships. Across to the U.K., and we've seen some great results. In the U.K., we're in the next phase of marketplace development, which we call it the 1 to 100 phase. And during this phase, we start to balance marketplace supply and demand in order to drive GMV, not just posted tasks. The result of this is that in Q4, our GMV in the U.K. increased 71% quarter-on-quarter and more than 104% on pcp. We also reached a weekly GMV of approximately GBP 100,000 per week, which is a great milestone to pass. During the same period, supply and demand continued to grow in line and are quite balanced. Posted task was up about 115% on pcp and offers was up about 118% on pcp. We achieved these strong results by running a very successful above-the-line campaign in the U.K. tube stations. This turned out to be a really, really cost-effective medium for us to be able to build our brand. We also partnered with a great influencer named Phil Spencer, who is sort of like the Scotty Cam, the host of the Block of the U.K. And he became a campaign ambassador for us, which is incredibly important for us to build our credibility. This has started to build up our organic PR momentum and resulted in coverage on ITV and BBC and also put Airtasker into the spotlight in terms of being an ambassador for the rising cost of living issue in the U.K., which is really, really relevant at the moment. So we saw some really, really solid growth in Q4 of FY '22. But if we do look back over the year, FY '22 has been quite a challenging year, and there are a number of headwinds, which we faced throughout the last 12 months. First of all, in Q1 of last year, we saw government-mandated COVID lockdowns. And in Q1 of last year, this impacted us by something like $10 million to $12 million during Q1 and Q2. So that was a very significant impact. Thankfully we saw a really strong bounce back out of those lockdowns and into Q2 and Q3. In the second half of FY '22, we started to see excess rainfall and flooding. And it's been quite a horrendous situation with more than 2x the amount of rain in FY '22 compared to any year, compared to the median year, I should say, before. This does have an impact on our marketplace, particularly on cancellations, which can increase up to 1.5% during heavy rainfall. Thirdly, we saw a headwind in terms of the labor shortage. There's, of course, been depressed immigration with 600,000 people leaving Australia during COVID and a much lower number of international students. This has resulted in a very, very low unemployment rate in Australia. And the effect that this has on our marketplace is that it increases the supply pressure. Supply pressure on Airtasker is a measure of the available workers on the platform versus the amount of demand on the platform. Thankfully we've previously been really supply heavy. We've had a lot of taskers per job available. As that's eased off, that certainly has been detrimental to our marketplace. Nevertheless as the labor shortage unwinds, we think that we will be a net winner out of that situation. So overall, we delivered a strong result in FY '22 despite these challenges of a difficult macroeconomic environment over the past 12 months. I think this really demonstrates a highly resilient and adaptive marketplace business model. So in FY '22, for the full year, we saw GMV up about 23.8% to $189.6 million of GMV and revenue was up about 19.1% to $31.5 million. This growth was delivered in revenue, was delivered despite a decrease in the take rate from 17.4% to 16.5%. This accounted for about a 5.1% revenue difference on a like-for-like basis. So why was the take rate different in FY '22 compared FY '21? Primarily the decrease in take rate was due to Airtasker helping taskers and supporting them during COVID lockdowns. So we reduced our fees and allowed taskers to maintain their status on the platform. And this helped to build loyalty and make sure that we could bounce back with a strong base of supply post lockdowns. We also have some heightened cancellations, which were caused by that excess rainfall. So when the tasks happen and they're organized and then, of course, you have flooding, you see an increase in cancellations. That impacts our take rate too. We have seen that take rate since then stabilized much higher in June 2022. And given that on Airtasker, as a platform, we do control the cash flow throughout our ecosystem. The take rate is really a measure of how much we want to share the total GMV between taskers, customers and Airtasker as well. So we're very comfortable that we have control over the take rate. We're going to monitor that and continue from there. I'm now going to pass to Nathan to provide an overview of key items in our P&L.
Thanks, Tim. So Tim has covered a lot of the top line financial performance already in the first part of this presentation. And as discussed, we've shown here the Q4 performance alongside FY '22, given that much of the first half of the year was impacted by COVID lockdowns. Tim has talked about that translated by management estimates into loss potential revenue of more than $2.3 million. And as Tim has also called out, revenue in the first half was also impacted by our decision to build trust with our taskers with the freezing of the tasker tiers, and that resulted in that lower take rate. So in light of these factors, we feel that the Q4 revenue growth of 30.6% on Q4 FY '21 is a strong result. During FY '22, we invested into growth in new marketplaces; in the U.S. and in the U.K. As you're aware, that's in line with our stated strategy. And that's reflected in that uplift in operating expenses from $24 million to $39 million. Around half of that increase is in higher marketing costs. That's split across the channels that we know work best for Airtasker, in new markets as well as the scaling marketplace in Australia. That includes PR content-based digital advertising and the Joy of Done above-the-line campaign, which was launched in Australia and the U.K. in the second half. Tim has already spoken to some of those highlights of the marketing efforts, in particular, in the U.K., and we'll cover more of that later in the presentation as well. Our technology and general and admin costs increased by around about $2.5 million during the year versus FY '21. That's to support growth in GMV throughout the year. And the balance of the uplift was in employee benefits expense. That's driven by a number of factors. We invested into our marketing team to support those initiatives that we've talked about already across the U.S., the U.K. and AU. Those people are all based here in the head office in Sydney. FY '22 included the full annual cost of our U.S. team after acquiring the Zaarly assets towards the end of FY '21. And we made some modest increases to our data science and data product teams as well to use data insights to drive growth through product improvements. We also had some one-off redundancy costs of around about $0.5 million. Tim is now going to take you through in a little bit more detail how we've allocated that investment across strategic investments.
Thanks, Nathan. As we've mentioned in some of our previous investor presentations, Airtasker operates marketplaces that are in different stages of maturity. And in each stage of these marketplace development maturity, it generates different kinds of unit economics. For example, in Australia, we have scaled marketplace that generate really strong gross profit, whereas in the U.S. and the U.K., we're building out new marketplaces that require initial investment to generate early liquidity and establish those network effects, which deliver the gross profits that we've seen in Australia. So that we can break down the underlying unit economics of the overall Airtasker group, we've created a notional non-statutory split of financial performance in which we allocate revenue based on the customer location for each marketplace, so Australia, the U.S. and the U.K. We also allocate all the direct costs like our marketing, our marketing infrastructure, customer support costs, et cetera, to each of the countries based on a relevant customer traffic or task volume split. So all of the revenue and the costs are allocated out to the countries. And then at the head office level, we have 2 main kinds of costs. One is our operational costs. So that's all of the engineering, maintenance, operations of the platform plus any of the back-office leadership, the finance team, the legal team, the HR team, et cetera. So that's the operations side of head office. We also have R&D investments, which are investments into incremental new products and features to generate new long-term GMV and revenue opportunities. So on this notional basis, our scale of Australian marketplace generated EBITDA of about $19.4 million in FY '22. And this actually covered the full cost of our global head office operations, excluding R&D, and generated a positive combined EBITDA of $1.3 million. On top of that, we are committed to R&D to unlock new segments of the marketplace. We've talked a lot about repeat customer purchase between the same customer and the same tasker. We're doing that by investing into contacts. We're also investing into things like Airtasker Pro, which is enabling us to unlock that high-value trading segment. So we do and are very committed to investing into long-term technology and R&D. We're also committed to scaling in the U.S. and the U.K., and we're doing that in order to replicate the success that we've achieved in our scaled Australian marketplace. But in order to do that, it requires investment in generating that initial liquidity and developing those network effects. It is worthwhile calling out the form of that investment is primarily variable marketing expense. It's investment into Google ads, it's investment into our PR, into our branded organic and things like that. And so that investment into the U.S. and the U.K. can largely be dialed up and down as we see fit and based on the weighted average cost of capital that it costs us to invest into those markets. And to put that more pragmatically, in calendar year '21, so the first half of this financial year the cost of capital was much lower, in the second half of FY '22 the cost of capital has been much, much higher, and so we are moderating the investment into the U.S. and the U.K. based on -- with that as one input. Airtasker is really well positioned for ongoing growth. We have about $31.8 million of cash and equity receivables on our balance sheet. We've got a really strong gross margin of about 93%. And overarchingly a very low cost to operate, which means that we can tune up these long-term investments up and down as we see fit and based on the cost of capital. Given the current macro environment, we have implemented a program of efficiency, and we're really focused on initiatives that can help to reduce our fixed cost base. So fixed headcount has been reduced in long-term R&D and nonrevenue-generating functions. We've started to merge Airtasker and Oneflare business processes, so things like customer support, we've merged the 2 entities to create an efficiency there. We've merged our site reliability engineering teams and consolidated that function to make sure we're as efficient as possible. And for example, we are reducing our G&A costs by, for example, reducing our leasing expenses. So one player had a physical premises, as did Airtasker, we certainly don't need new 2 physical premises in the current hybrid remote working environment. So we are subleasing one closed office, and that's got a meaningful cost reduction. Airtasker Australia, as mentioned, is already producing positive EBITDA. But as a group, we do expect to be cash flow positive in the next 12 months overarchingly. We expect cash flow to improve quarter-on-quarter from here on in during FY '23. And all of this is based on the current run rate of investment into the U.S. and the U.K. I'm now going to pass over the mike to Nathan to speak through some of the key balance sheet items.
So there's only a couple of real callouts here. Firstly the difference between the cash and cash equivalents line there of $28.2 million and the $31.8 million that Tim has been quoting is a receivable from our May capital raise, which actually settled on the 19th of August. So that's the difference that takes you to 31.8%. And I think that when you look at that in the context of what Tim's just discussed around hitting cash flow breakeven positive towards the end of this year and the cost reductions that we've already executed on, that puts us in a really strong financial position, certainly, no need to raise capital off the basis of that cash amount. The only other call out here that hasn't really been covered is the increase in the intangibles line. You can see that going from 9.6 to 23.1, and that's driven by the acquisition of Oneflare, for the bulk of that with capitalization of development costs, contributing another $2.5 million of that increase. And Tim is now going to talk through the outlook for FY '23.
Thanks, Nathan. So in FY '23, we believe that Airtasker is pretty well positioned to benefit in an inflationary macro environment. So first, looking at the demand side of our marketplace. Flexible labor tends to be a cheaper alternative compared to traditional labor. And we believe that that could actually drive greater demand. Whilst we see that lower consumer confidence is probably going to impact overall customer spending and thus reduced demand into services. We're actually seeing that about 70% of the jobs on Airtasker are essential services, they're nondiscretionary services. So we expect that to be quite robust during a high inflation period. Then looking, potentially more importantly, to the supply side of our marketplace with less economic growth and potentially a tapering of job creation, we see that there's going to be an increased availability of workers. Further hopefully, we see a reversal of immigration barriers and COVID absenteeism. And I think that could also help to increase our worker availability. We've also built out a new business model by acquiring Oneflare and Oneflare is actually a slightly different revenue model, which is largely a supply-driven model. So this gives us access to the high-value trade segment, but it also serves to diversify our revenue models. Now let's look forward to the future. We've got a 2-pronged growth strategy at Airtasker based on the different stages of marketplace maturity, which we've covered in the financial section earlier. So in Australia, we've got a scaled marketplace, which already has liquidity and built in our network effects. And we're looking at leveraging that to continue to drive profitable marketing, and we're optimizing to generate as much gross profit as we can out of the Australian marketplace while continuing to drive growth. We're also opening up new customer segments and use cases in Australia. So for example, we've developed a product called Contacts, which opens up the opportunity for rebooking. And we've also acquired Oneflare, which enables us to access the high-value trade segment, which we believe is very meaningful. So that's our one strategy in the Australian market. Then if we look at our new marketplaces in the U.S. and the U.K., we have a separate strategy, which is that we're focusing on attacking the long tail of services to build up liquidity and network effects so that we can replicate the success that we've generated in Australia. In the U.S., our strong focus is on demand generation and creating new posted tasks, which we're already starting to see be effective. In the U.K., we're building the brand and balancing supply and demand to drive GMV. We're seeing some great effects now in brand and PR. And we've also got some really exciting partnership opportunities that we are exploring. So as I mentioned, in Australia, opening up that high-value trade segment is strategically important to Airtasker. As you know, we successfully acquired Oneflare on the 25th of May this year, about 5 weeks before the end of the year. The reason why we acquired Oneflare is to strengthen network effects. We're bringing in 540,000 new customers to the Airtasker marketplace and about 14,500 new service providers. That's going to give us more liquidity and better and faster matching, which is great for the customer experience. The second reason we acquired Oneflare is to unlock the high-value trades opportunity. Oneflare focuses on businesses rather than individual taskers. So it's a whole new category of suppliers for us, which is super exciting. They also have a very different payments model, which is focused primarily on a monthly, quarterly or year-long subscriptions, which we believe will provide a great layer on top of the transactional or pay-as-you-go revenue that Airtasker generates. Thirdly we believe that there are significant benefits from having a single technology platform. So by combining our technology stacks and consolidating our back-office operations, we believe there's a huge synergy to be had there. The integration of Oneflare into the Airtasker Group is tracking to plan. I'll remind you here that we believe it's important to first take over Oneflare, then build out the Airtasker Pro solution and only migrate customers from Oneflare to Airtasker Pro once we have really, really strong product market fit. So to date, so far, we've taken over all of the software platforms of Oneflare, and we're currently working on extracting the network effect opportunities from the combined marketplace. So just bringing those customers together, sharing jobs across the 2 independent platforms and combining supply bases as well. Finally we're also implementing a number of cost synergies. As I mentioned before, we've consolidated the 2 customer bases in -- of our Oneflare and Airtasker. And we're also subleasing Oneflare's property, which is a significant cost synergy for us. In terms of product, our product teams continue to invest into the core Airtasker customer experience and our 3-year product vision. So we had an investment into the core product through things like a new poster task flow, which is really a lot of friction. We've got both the before and after here. If you're an iOS user, shut out, I find it incredibly a better experience and super seamless. And we're also on the right-hand side here, really working through mobile native experiences to do things like verticalizing the price task form. So for example, in segments like cleaning, gardening and moving, you'll now have a verticalized experience where we predict the category that you're posting and it make it super easy for you to get through that flow. Other product investments include significant investment into Smart Task Alerts. This is all driven by artificial intelligence, which enables us to match the right tasker to the right task. Super complicated stuff because of Airtasker's infinitely horizontal marketplace, but really, really powerful work there, which helps to enhance that core experience of Airtasker. Finally we're also working on our contacts, our product, which enables that rebooking experience. So for anyone who's worked with a tasker, had a great experience with them, you can now pick up your app, find that tasker, message them and you'll be on a much lower fee rate for those subsequent tasks. In FY '22, our marketing teams invested into a great dealer community and brand building exercises. We launched a number of community initiatives to build loyalty with our tasker-based community like freezing tasker tiers, implementing tasker bonuses to encourage taskers back to the marketplace post lockdowns. And of course doing things for our community like investing into COVID badges, which helps to create a more trusted and reliable experience. We also launched our Joy of Done brand campaign globally, and that saw a prompted brand awareness increase in Australia by 15% and awareness in the U.K. jump by 21% in what is already a really, really strongly recognized brand. So some great progress there. We're also efficiently scaling marketplace, our growth in 2 things. One is that we're absorbing existing demand through in-house content, which we can create on the fly to be super agile and then finding those relevant seasonal messages. So for example, if it's Mother's Day, Valentine's Day, Halloween, we can then push those messages by a number of organic and unpaid channels like SEO, social marketing or even CRM. That's e-mails and push notifications. Finally we're also inspiring new demand. So as well as just sort of say, hey, you already want this task done. We're going to help you be that person. We also need to tell you, hey, Airtasker is that place where we can hope you get stuff done, which you never thought possible. So the way that we do this is that we've found a great playbook where we can identify user-generated content, these inspiring people in our community, and then we take those tasks and we re-share that content through multiple platforms. So that can include things like promoting it via TikTok or Instagram Reels or by doing things like newsjacking in PR. So calling up the journals and say, hey, we've got a great tasker story for you here. And so this inspires users and helps to create more use cases for the Airtasker marketplace. So I've given a pretty comprehensive update, hopefully, today about the fourth quarter results, the full year results as well as progress that we're making across our growth strategy. But now happy to spend some time, and Nathan and I can take any questions.
I'm going to curate the questions as they come in. I'll just remind you to use the Q&A function if you want to ask a question. And we've had a number of questions in already. What I'll do is where we've had questions, multiple questions that relate to the same topic, is I'll try and group them together, so we're not kind of repeating the same questions over and over again. So to start us off, the first question relates to the current high inflation, high interest rate environment. How does that impact on consumer confidence affect Airtasker? And a related question, how much of your tasker revenue comes from discretionary spend, Tim?
Yes. So I think on the inflation side of things, we did cover off some of this during the presentation, but I think there's a couple of -- there's 2 sides to that equation. One would be on the revenue side of things and the marketplace growth side of things. We think that in an inflationary environment, we're going to see a greater degree of supply coming into the market, less jobs being created, more available workers. We also think that services on Airtasker are primarily essential and nondiscretionary. So you're going to see those not be too impacted. We see about 70% of the services on Airtasker in that nondiscretionary space. Then on the cost side of things, I think it's really interesting. Airtasker has got a cost of goods sold which consists of really just payments and insurance. And neither of those things are really driven by inflation. That said, there is an increasing cost of capital. And for that reason, we think it's really important to be fiscally responsible and manage costs. And for that reason, we've reduced our -- in the later parts of FY '22, reduced our investment into long-term R&D, and we're really managing that cost base to make sure that we're absolutely not reliant on external capital. And in fact, we expect to be cash flow positive during FY '23.
Okay. The next question is in relation to the U.S.A. As the U.S.A. going to plan, how long before you see significant dollar growth as opposed to growth of a low base? Is the concept, the Airtasker concept being accepted in the U.K. and what further investment is required to achieve growth?
Yes. So let's start with, I guess, the competitive landscape and how the U.S. market is sort of adopting Airtasker. So the first thing I can say is that in this infinitely horizontal open marketplace format, Airtasker is in a market of one. So we don't have any direct competition in that space. We do have, of course, Craigslist and some of these open kind of social platforms. We've also got some of those traditional providers like Angie's, HomeAdvisor and Thumbtack, which all compete in that traditional space. For that reason, Airtasker is attacking what we call the long tail of services. Everything that doesn't fit into the Angie's, HomeAdvisor or Thumbtack bucket is what Airtasker is focused on. Thus our strategy is all around those cultural moments and that long tail of services. So in the U.S., I think this strategy is really starting to play out. And what we're seeing is that in Australia, over the first sort of 7 years of building the business, we invested about $25 million. And it took us about 3 years to get to 1,000 posted tasks a week. We've been able to do that in the U.S. in about a year. So we're definitely moving a lot faster in the U.S. There's of course trade-offs in either direction. I would say there's a higher cost of marketing in general in the United States. But on the other hand, it's a much, much larger country. There's huge overflow opportunity in the total U.S. TAM. So I would say that as a benchmark there, it took -- we've been in the Australian market for 7 or 8 years. We're generating about $19.4 million of positive EBITDA in the Australian market, but we did have to invest about $25 million over 7 years to get there. So in the U.S., I would say that we're ahead of the curve in relation to what we did in Australia.
Okay. Next question is what plans are in place to recover the significant share price fall?
Yes, I think it's fair to say that the entire growth in tech industry has been pretty heavily hit by what we would perceive as somewhat indiscriminant on share prices across all growth in technology companies. What are we doing about this? We are really focused on just delivering profitable growth in our business. And we're going to keep our heads down and really just focus on that. I think one of the important things that we've done today is provide that breakdown of, in Australia. We've got a scalable and profitable business, which is generating EBITDA and we're going to continue to focus on that. We don't want to take our foot off the gas entirely when it comes to investment into the U.S., the U.K. and future product development because that's really how we drive long-term growth. And here at Airtasker, we're really here for long-term growth and long-term investment. So it is a balance between being really fiscally responsible, focusing on cost management and making sure that we are absolutely not reliant on external capital whilst also driving both the short-term and the long-term revenue of the business.
Okay. A couple of questions about international expansion plans and growth. So do we have any further acquisition opportunities in Australia, U.S.A., the U.K., et cetera? What other international expansion plans do you have? And any impediments to local or international growth?
So I think let's first start with the acquisition opportunity question. I would say that Airtasker has positioned itself really well from a balance sheet and a capital management perspective. So I think we're in a very, very strong position. I think that a lot of marketplaces, as we've kind of illustrated, it takes time, and it requires a minimum amount of scale to create a really strong financial business model. And so for that reason, I think there's going to be a lot of companies which are kind of on that journey, and they're going to find it difficult during this next economic phase. And I think that could present acquisition opportunities to Airtasker. Second question, part of the question was, I think, about impediments to growth in the U.S. and the U.K. I wouldn't say it's about impediments to growth. And actually, as mentioned, there's not really a high degree of competition in the U.S. and the U.K., and we're actually tracking ahead of the speed that we grew in our Australian market. So I think it's really more about refining and optimizing the growth strategy that we've set out and making sure that we're really balancing speed of scaling into those markets with financial efficiency too and making sure that we're keeping the cost of capital in mind when we're doing that. Right now that cost of capital is pretty high. And so we're being very, very responsible with how quickly and efficiently we scale into the U.S. and the U.K.
Okay. Now a question about brand awareness. There's a step change in revenue and brand awareness after we did the partnership with 7 West Media. How do you see the U.K. and U.S. playing out in future compared to Australia? How do you intend generating the same level of brand awareness that was achieved via the Channel 7 deal?
Yes, it's been really incredible in Australia. So for those who -- some additional context, our 7 West Media, our partnership wrapped up about 18 months ago or 2 years ago. And since then we've successfully transitioned all of that investment, which we used to put into above-the-line TV marketing into organic new media. So through things like TikTok, billion engaged audience like Instagram and being out to build brand through these newer kind of online channels. In the U.K., we're also working on similar kinds of partnerships with the BBC, with ITV, with Channel 4 and folks like this. And we think there are massive opportunities there. In the U.K., we probably are coming up to that stage where we will start to invest into above-the-line marketing. So we've got a -- there are lots of different ways that we can do that, including our partnerships like the one that we did with Channel 7. In the U.S., we are in that earlier phase. We're not yet focused on just driving all our prompted brand awareness. So we're in the early stage there. But as mentioned, in the U.K., I think there really is an opportunity to do above-the-line marketing to build Airtasker's brand presence, and we may explore opportunities like the ones that we did with Channel 7 in Australia, which was really a great experience for us.
Okay. Two related questions, I think the current market has caused other growth companies see these problems trying to raise new capital. Can you maybe just comment on the ability to raise capital as a growth tech stock? And I think a related question, explain a bit more about the decisions in relation to redundancies, considering the company as a growth company.
Sure. So I think, first of all, let's talk a little bit about raising capital. So Airtasker has got about $31.8 million on the balance sheet, and we have positioned ourselves so that on a monthly basis, we're going to be cash flow profitable -- cash flow positive, I should say, during FY '23. And we are committed to that given the current economic environment. So in terms of raising external capital, if the current conditions persist, whether the cost of capital is very high, we are not in a position where we need to raise capital, which I think is a great position to be in. What was the second part of the question again?
Second part was just explain a bit more around the decisions on redundancies given we had a growth company.
Yes. So where we made redundancies and headcount reductions at Airtasker during the second half of FY '22 was primarily in long-term R&D and nonrevenue-generating roles. We did also create some significant efficiencies in our back office, for example, with Oneflare and Airtasker coming together. There were some, albeit a smaller part of the cost management and headcount reduction in functions like HR and finance as well. I would also say that part of the cost management that we've done as well is to lower our forecast, the headcount expansion. And so that's been a really, really important part of making sure that we can get to that cash flow breakeven in FY '23.
I think it's a really, really good question to ask about our growth versus our headcount. We're in a fortunate position in Airtasker where we've got the dynamics in the financial economics of like a real tech company, which is that scaling volume for the most part does not mean that you need to scale headcount. The vast majority of our marketplace is nonoperational. So customers come together with taskers and they work out the tasks. If the number of tasks is to 10x and our revenue are 10xs, we don't necessarily need to have 10x more staff. And in fact, we almost certainly wouldn't have 10x more staff. So there is a fixed cost, which we need to invest into our product and maintaining the overall platform infrastructure, which we've broken down in the financial economics, which we shared today. But that part is largely fixed. The great thing is -- so which means that it doesn't scale as revenue scales and margins should continue to expand. Of course, one of the great things is that Airtasker has built enough scale in the number of transactions on the marketplace to actually cover those fixed costs, which we expect to be in a position overall as a group, to be cash flow positive by the end of FY '23 on a monthly basis.
Okay. We've only got a few minutes left. So I'll maybe just finish off with a couple of a bit more technical financial questions. I think maybe Nathan covered this, but do you expect to reach cash flow breakeven with current cash at hand, i.e. don't need to raise additional capital?
Correct. Yes. I think we've both covered that, but the answer is yes. Yes.
Okay. And can you give us an update on how GMV is going in FY '22 so far in Australia and internationally?
Yes, I would say that we're seeing a pretty similar seasonal growth pattern compared to FY '22 and FY '21, noting that in both of those previous years, we had significant COVID lockdowns in the first quarter. So you recall then July to October FY '21, we actually had significant lockdowns in Melbourne. And then in July to October of 2021. So last year we also had significant lockdown. So we're tracking well, well, well ahead of those curves, but we also have less of an accurate baseline to kind of judge this quarter's performance. So maybe I'll just wrap that up really quickly. Both the first quarter of FY '21 and FY '22 were impacted by lockdowns. Thankfully right now we're not seeing that direct impact of COVID lockdowns and so we're well ahead of the seasonal expectation based on those last 2 years.
Okay. Do you track rescheduling or on the day cancellations, looking at the current COVID wave and what impacts for task delays and cancellations?
Love this one. So one of our key product investments at the moment is gathering more specific data on cancellation outcomes. And so right now, for example, on Airtasker, if somebody cancels on you, you can't leave a review. And so we don't have direct feedback on what caused that cancellation or how it happened other than our own analysis. So we're now collecting that from customers, and we expect to gather some really, really interesting insights here. One of the things that I would call out about cancellations that is actually powerful on Airtasker is that on most of these sort of like advertising type platforms or lead generation platforms or directory platforms, you actually don't have a closed loop, i.e., the platform enables advertising or particularly be able to connect, but you don't actually know what happened?
Like was the experience good or was it bad? The powerful thing about Airtasker is because we have the end-to-end payment loop and the transaction is all managed through Airtasker, we actually know when cancellations occur and this enables us to be able to actually focus in on that and amend the platform and implement incentives to make sure that we can reduce those cancellations as well. And that's what really is going to drive the long-term customer experience on the platform and ultimately make sure that Airtasker remains the #1 marketplace for [indiscernible] services.
Okay. Last question. There have been a few others, but they're either really, really, really specific or probably not the right ones for this forum. But last question, can you speak a little bit further about the Oneflare acquisition and how that ties in with Airtasker Pro development? It seems like the duplication, did we just buy customers?
Yes. So 2 things. So the reason why we acquired Oneflare was there was 3-fold. One was strengthened network effects. So absolutely, yes, we bought customers, and we bought a base of active service providers on the platform, about 540,000 customers, 14,500 active service pros. And I think that is incredibly valuable. It's not 1 plus 1. When you have a marketplace, it's 1 plus 1 equals 3 or more. So that was one part of it. The second thing about Oneflare is that it focused primarily on the paying customer being the small business that was active on the platform. And this has been 2 things. One is that they have a different payment model. It's actually the service provider who is the paying customer on Oneflare and they typically pay through a subscription model. We think that this is really, really effective. Our customers on Airtasker have been screaming out for a subscription-based model. And so layering that subscription payment model into the Airtasker marketplace, we think, is going to be very, very valuable. The second consequence of Oneflare focusing on the small business as the paying customer is that they have a high degree and a large suite of features, which hope that small business be successful on the platform. One example of that would be quote management. So they actually have a quite sophisticated quote management system, which allows that small business to be able to identify the jobs they won, push their quotes and then manage it all the way through, which is something that Airtasker hasn't yet built into its roadmap.
So just closing the loop on that, I think there is definitely a network effect and a scale component of the Oneflare acquisition, but there's also a huge suite of features in the form of the subscription payments and the business features, which we gain. And we are going to be bringing that into one platform, and we're going to be -- the working title for that is Airtasker Pro. We're absolutely committed to that single platform synergy, but we also do need to moderate how quickly and efficiently we invest into some of these long-term product investments given the cost of capital and the imperative to make sure that we're not reliant on any external capital raisings and to make sure that Airtasker is cash flow positive during FY '23 on a monthly basis.
Okay. That's it.
Awesome. Thank you so much, everyone, for your ongoing support and for showing up today. I really enjoyed sharing an update on the business with you all, and I hope to stay in contact. Thank you so much.
Thank you.