Here's why the Airtasker (ASX:ART) share price is shooting 12% higher

The Airtasker Ltd (ASX:ART) share price is storming higher on Wednesday after outperforming expectations during the third quarter…

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In morning trade, the Airtasker Ltd (ASX: ART) share price is charging notably higher.

At the time of writing, the local services online marketplace provider's shares are up a sizeable 12% to $1.43.

Why is the Airtasker share price climbing higher?

Investors have been bidding the Airtasker share price higher today following the release of its third quarter update.

According to the release, the company's performance was ahead of expectations and prospectus assumptions during the third quarter.

As a result, management is confident that it will exceed its prospectus forecasts and has upgraded its FY 2021 gross marketplace volume (GMV) and revenue forecasts accordingly.

Third quarter performance

For the three months ended 31 March, unaudited GMV came in at $41.2 million. This represents 57.9% of the second half FY 2021 prospectus forecast of $71.3 million.

As a result, it has lifted its full year FY 2021 GMV guidance to between $148 million and $152 million from $143.7 million.

In respect to revenue, this increase in GMV led to unaudited quarterly revenue of $7.1 million. As a result, revenue guidance has now been upgraded to between $25.5 million and $26 million from its prospectus forecast of $24.5 million.

This was driven partly by an increase in customers. Airtasker revealed that its cumulative paying customers now exceed 1 million.

Lower costs

Also giving the Airtasker share price a boost today was news that the company's costs were below forecast during the third quarter. This led to Airtasker generating $2.1 million of positive operating cash flow for the quarter (excluding IPO costs).

Following today's gain, the Airtasker share price is now up 120% from its IPO listing price of 65 cents.

However, it is still trading some distance from its 52-week high. Investor excitement shortly after its IPO led to the Airtasker share price rocketing as high as $1.97 in March.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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