Airtasker: A resilient 2Q22

About the author:

Steven Sassine
Author name:
By Steven Sassine
Job title:
Associate Analyst
Date posted:
01 February 2022, 9:30 AM
Sectors Covered:
Diversified Financials

  • Airtasker's (ART) 2Q22 update continued to highlight the resilience of the marketplace (GMV growth of +23% on pcp) despite ongoing COVID-related disruptions/lockdowns.
  • Post lockdowns easing, GMV rebounded strongly over Dec-21 (A$4.5m weekly GMV run rate), with offshore regions also showing promising initial traction (e.g. U.S. seeing posted tasks +71% on 1Q22 and UK GMV being +121% on pcp).
  • We factor in todays updated FY22 GMV guidance (now A$191m-A$194m), making only slight changes to our FY23/FY24 and outer year topline estimates. Our price target remains unchanged (Morgans clients login to view). We remain attracted to ART's core product proposition and long growth pathway, seeing upside from GMV acceleration post disruptions easing. Add maintained.

2Q22 update shows marketplace resilience

Airtasker released its 2Q22 trading update to the market, which highlighted marketplace resilience despite continued (albeit reduced) COVID disruptions over the quarter (i.e. 32 major city-days in lockdown over 2Q22 vs 188 days in 1Q22).

Digging into the details

  • 2Q22 GMV of A$48.6m (+23% on pcp, +39% on the sequential quarter) takes the 1H22 GMV to A$83.6m (vs MorgansE A$85.8m). The quarterly result being achieved despite the broader economy continuing to be impacted by Omicron (e.g. ongoing lockdowns, particularly Oct-Nov). Highlighting the marketplace strength, GMV rebounded strongly over December, with a record A$4.5m weekly GMV run-rate being achieved (avg task value now at $255, +24% on pcp). 2H22 GMV is now expected to be in the A$107m-A$110m range (taking the FY22 GMV guidance range to ~A$191m-A$194m, vs pre-lockdown impacted guidance of A$200m). Ex-lockdown impacts, management estimated underlying GMV would have been in the range of A$205m-A$208m.
  • Internationally, the US marketplace saw posted task growth of 71% on 1Q22 (early focus in this market being posted tasks to build Tasker engagement). Similar to the trickle over effect seen in the Australian market during its build-out, additional growth has also been seen in non-core U.S. cities. In the UK, 2Q22 GMV grew 121% on pcp, with both sides of the marketplace seeing strong growth (i.e. posted tasks +106% on pcp and offers made up 102% on pcp). Management remain confident of reaching the A$8m-A$10m international GMV run-rate by end of FY22 as marketing spend begins to ramp.
  • The 2Q22 revenue of A$8.1m (+17% on pcp, +37.5% on 1Q22), implies a 1H22 take rate of ~17% (vs historic take rate of ~17%-17.5%).
  • Post the ~A$4.7m in operating cash outflow for the quarter, ART still retains ~A$34m of cash on balance sheet, which in our view, has ART well funded for growth internationally whilst still investing in product innovation across the platform.

Forecast and valuation update

We factor in the update and revised FY22 GMV guidance into our forecasts, with only minor changes to our FY23/FY24 topline estimates (~0-1%).

Our slightly lower near term GMV forecast is offset to a degree by an improved GMV growth profile assumption from offshore in the medium term.

Our price target is derived from an equal weighted blend of DCF/relative value methodology and remains unchanged (clients login to view). Add maintained.

Investment view

We continue to remain attracted to the long growth pathway ahead for ART, predicated on it successfully implementing its strategy of penetrating the prodigious TAM opportunity both domestically and offshore.

We see this update as a reminder of the resilience of the marketplace to adapt to adverse exogenous factors. Whilst still quite early in its expansion plans, we expect an acceleration in GMV post disruptions easing with further evidence of offshore traction likely to be a positive catalyst for the name.

Risks

Unforeseen elevated investment in product/platform; international expansion not generating expected ROI's; competitive threats; unfavourable legislative change; COVID-related impacts (e.g. tasker supply impediments with reduced migration).

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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