​Escrow.com acquisition sends Freelancer AU$4.5m into the black for H1

Freelancer has released its financial results for the first half of 2016, seeing the outsourcing e-marketplace in positive territory off the back of two consecutive first half losses, posting a six-month operating cashflow of AU$4.5 million.

For the six months ended June 30, 2016, the Australian-listed company's gross profit was AU$22.7 million, with earnings before interest, taxation, depreciation, and amortisation (EBITDA) at AU$500,000.

Revenue was also up 56 percent year-on-year to a record AU$26 million for Freelancer.

The six-month period is the first for the company that includes full contribution from the Escrow.com online fraud protection business.

Although the acquisition was announced in April 2015, the deal with the California-based third party payments vendor was not paid for until the fourth quarter, with Freelancer spending just over AU$10 million on the $7.5 million purchase in November.

The purchase reduced its total operating and investing cash flow to a AU$9.7 million loss for 2015.

Freelancer CEO Matt Barrie told shareholders on Thursday that the company's AU$354.9 million gross payment volume -- representing growth of 453 percent over 1H15 -- was driven by the Escrow.com acquisition.

"Freelancer is continuing its exceptional growth, with record net revenue, gross volumes, registered users, and posted projects in 1H16. Freelancer's growth is accelerating and it is at an inflection point in terms of profitability," he added.

Freelancer also attributed its record cash receipts of AU$12.8 million for the first quarter of 2016 to the Escrow.com acquisition, reporting positive operating cash flow of AU$1.9 million.

During this year's first half, the company added 2.1 million users, seeing its total user base sitting in the ballpark of 20 million.

While the company has not made any grand announcements or acquisitions this half, Barrie took on the New South Wales government at Knowledge Nation 2016 earlier this year. Barrie pointed out that Australia is missing out due to education and innovation being tied up in the bureaucratic confusion and absurd policies of state governments.

"The situation, I believe, is an absolute crisis," he said. "If there's one thing we need to do to fix this industry, it is get more people into it. Unfortunately, the curriculum in high school pays lip service to technology."

He continued to say that he believed getting all state governments to agree to modernise the curriculum is an "exercise in futility or sadomasochism".

"I've come to the conclusion it's actually all too hard to fix," he said. "I think we should abolish state governments."