Year of acquisitions leaves Freelancer with AU$1.5 million loss

Australian online freelancing and crowdsourcing marketplace provider Freelancer has reported a net loss after tax of AU$1.5 million after a string of new acquisitions in 2014.
Written by Leon Spencer, Contributor

The Australian operator of global online freelancing and crowdsourcing platform Freelancer.com has reported a net loss after tax of AU$1.5 million for the year ending December 31, according to its latest annual financial results.

2014 was a year of growth for Freelancer, with the company not only building its user base organically, but also expanding its international footprint through a series of acquisitions during the year, including internet marketing marketplace Warrior Forum, virtual content marketplace Fantero.com, and Polish pure play marketplace Zlecenia.przez.net.

Freelancer also picked up local technology startup conference SydStart for an undisclosed amount in November, taking on the event's founder Pete Cooper as its new regional director of Australasia.

At the end of the 2014, the company claimed a global workforce footprint of 390 full-time employees across four countries, including Canada, the Philippines, and the United Kingdom, in addition to its home country, Australia.

Freelancer said in a statement to shareholders that as a result "of the accelerated reinvestment in future growth", it had reported an operating net profit after tax (NPAT) of AU$-1.5 million, and operating earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$-2.1 million.

However, despite Freelancer's increased capital expenditure and investment in new acquisitions and staff, the company came close to breaking even, reporting an operating cash flow of AU$-100,000 for the 12-month period.

Certainly, Freelancer's organic growth, combined with the new user base resulting from its acquisitions, has been kind to its revenue figures: The company reported a record 39 percent increase in net revenue on the previous year, up to AU$26.1 million.

Meanwhile, Freelancer's unaudited gross payments volume grew by 23 percent, to AU$103.7 million, from the previous year's AU$84.4 million.

It also saw 4.6 million new registered users in the 12-month period, representing a 60 percent increase on the previous year's figure of 2.9 million new users. Freelancer saw its total number of unaudited registered users grow to 14.3 million -- almost 5 million over its previous year's tally, which stood at 9.7 million as at December 2013, representing a 47 percent increase.

Meanwhile, the company saw a 31 percent increase in unaudited new projects and contest numbers, to 1.6 million, while reporting a 32 percent increase in total unaudited projects and contests posted, to 6.9 million for the year.

At the end of 2014, the company claimed AU$20.2 million in cash and cash equivalents, down from the previous year's tally of AU$24.4 million at the end of 2013. According to the company's annual results, AU$3.7 million of this fall in its cash reserves was related to new acquisitions, including intangible assets.

"Freelancer is a high-growth internet company, and reflects this consistently with high growth in net revenues each year driven by growth in marketplace volume," Freelancer CEO and chairman Matt Barrie told investors in a statement (PDF). "We are proud of having achieved this track record of high revenue growth.

"In FY14, our focus was growth in project and contest volume, international growth in both countries, and language growth in mobile usage, and building out the Freelancer product set and features as well as user experience," he said.

Barrie also reiterated his lofty long-term mission for Freelancer, saying that he wanted to see the company beneficially change 1 billion people's lives on the planet by "providing them with a job secured through our platform".

"We are still in the very early days of this journey, but we've made a start. Today, over 7 million projects have been posted on Freelancer. It's a small step towards our goal, but a significant one," he said.

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