Airtasker (ASX:ART) share price falls 4% amid half-year plagued by COVID

Lockdowns leave more to be desired from Airtasker's half year result…

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Key points

  • The Airtasker share price is down 4% after releasing its half-year results
  • Despite being impacted by COVID-19 lockdowns, record revenue was achieved during the first half
  • The company plans to ramp up marketing in the United States and the United Kingdom to fuel more growth

The Airtasker Ltd (ASX: ART) share price is moving to the downside on Thursday. This follows the release of the company's results for the first half of FY22.

In early trade, shares in the services marketplace provider are down 4% to 72.5 cents per share.

Airtasker share price falls on record revenue

  • Record gross marketplace volume (GMV) of $83.6 million, up 15.5% on prior corresponding period
  • Record revenue of $13.9 million, increasing 10.4% year on year
  • Gross profit of $12.9 million, up 9.5% year on year
  • Take rate of 16.7%, flat on prior corresponding period
  • Average task value up 24% to $255
  • Upgraded guidance range for second half
  • Losses widen to $5.4 million from $2.06 million

What else happened during the half?

Airtasker battled through yet another six months of COVID-19 impacted operations in the first half of FY22. While the company maintained growth, imposed restrictions weighed on performance during the first quarter.

Fortunately, operations rebounded strongly during the second quarter as lockdowns across Sydney and Melbourne eased. The removal of lockdowns led to a 39% increase in GMV during the second quarter compared to the first.

Measures to support the Airtasker community during the half, such as tier freezing, resulted in a reduced take rate compared to the previous half. Clearly, shareholders are unimpressed with the compressed margins as the Airtasker share price moves lower this morning.

These actions — in combination with increased investment in product development and marketing — pushed the company's earnings before interest, tax, depreciation, and amortisation (EBITDA) into the negative by $3.2 million.

However, Airtasker pleasingly saw positive signs for its growth prospects across operations in the UK and the US. For example, UK GMV increased 121% to more than $4 million in the second quarter. Meanwhile, job postings in the US grew by 71% quarter on quarter.

What did management say?

Airtasker's co-founder and CEO, Tim Fung, commented:

We're super pleased to announce that the Airtasker marketplace has continued to demonstrate strong growth in H1. Whilst the first quarter was impacted by lockdowns, it was incredible to see our marketplace rebound rapidly in the second quarter to deliver a strong result for the half. By taking measures to support our Tasker community during lockdowns, we were able to bounce back together – and that feels awesome!

What's next?

Looking forward, the second half will be dominated by a significant push in marketing for Airtasker. Working-media market investments are said to be ramped up in the US and the UK. The company indicated the split of marketing spend in FY22 will be 20%/80% between the first and second half.

Additionally, Airtasker has upgraded its guidance for GMV in the second half as it sees strong growth ahead amid its marketing spend. The new range is between $107 million and $110 million, compared to the previous $105 million to $110 million range.

Airtasker share price snapshot

The Airtasker share price has underperformed the S&P/ASX 200 Index (ASX: XJO) in the last 11 months. Since listing on the ASX in March 2021, Airtasker shares have tumbled 28%. Over the same timeframe, the Aussie index has climbed 6.8% higher.

In addition, investors have been hesitant on unprofitable companies as interest rates look set to rise. With Airtasker still making a loss on the bottom line, the company has fallen victim to the recent waning in investor appetite for unprofitable growth shares.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. 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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