The ASX small-cap stock Airtasker Ltd (ASX: ART) currently trades at a share price of 30 cents.
There is a lot to like about the business, in my view.
As the chart above shows, the Airtasker share price has climbed 43% since 2024. I don't expect it to rise by 43% in 2025, but several factors make me believe the company can outperform the market over the long term.
Let's explore why I like this ASX growth share so much.
Strong market position
Airtasker describes itself as Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want to work.
Aussies can call on Airtasker for a wide variety of tasks, such as administration, furniture assembly, delivery, car work, pet care, various tradesperson tasks, gardening, photography, rubbish removal, and more.
By being number one in the industry, Airtasker can attract the largest number of tasks onto its platform, which can then lead to the most people willing to do the work. This positive self-fulfilling cycle can help Airtasker stay number one into the future.
Excellent revenue potential
Airtasker offers such a large range of tasks that it has an appealing addressable market to help Australians.
The ASX small-cap stock also has a small but growing presence in the United Kingdom and the United States.
In the first quarter of FY25, the company said its trailing 12 months of gross marketplace volume (GMV) had increased 11.7% to US$571,000 (A$860,000), and revenue had increased 64.1% year over year to US$86,000 (A$130,000). Just for the three months to September 2024, US GMV increased 40.2% year over year, and revenue jumped 116.8%.
In the UK, Airtasker's trailing 12 months of GMV were up 38.3% to £5.1 million, and its trailing 12 months of revenue jumped 66.3% to £835,000. For just three months, Airtasker's revenue grew 104.4% year over year.
Overall, Airtasker's marketplace revenue increased 13.6%. If an ASX small-cap stock can regularly grow its revenue in the double-digits, I think it can deliver compelling overall growth. As we know, revenue growth is a key driver of net profit and cash flow.
Compelling profit and cash flow future
One of the business's most appealing features is its high gross profit margin. In FY24, Airtasker achieved a gross profit margin of 94.5%. That means that almost all of its new revenue is turned into gross profit, which can be spent on growth activities such as marketing and software development.
With such a hit profit margin, the company could become pleasingly profitable in the future once it reaches a sufficient size.
The company has already reached positive cash flow, which is a great place to be because it means it's self-sufficient. In the first quarter of FY25, it had a positive free cash flow of $0.1 million and a positive operating cash flow of $0.9 million, up 31.6% year over year.
The ASX small-cap stock is currently investing heavily in growth in the UK and US by working with large television and radio companies. Considering how large those markets are, I think that's a good move.
If it can succeed in the US and UK, I think it can become a much larger business.
