Freelance’s revenue is about to accelerate as the Australian dollar continues its fall against the US dollar.
In a note to clients, wealth management adviser Canaccord Genuity says 90% of Freelance’s revenue comes from offshore, mostly the US and Canada, while 70% of costs are in AUD.
And the AUD has depreciated 25% against the USD over the last year.
“This positive jaws ratio will drive underlying/sustainable margin improvements,” says analyst Owen Humphries.
“We expect the benefit of this virtuous circle is likely to be underestimated by investors over the medium term.”
Freelancer posted record net revenue of $16.8 million, up 41%, and hit positive cash for the six months to June.
A 5% depreciation in the AUD means an additional $3 million in additional capital to reinvest in building the business.
As this chart shows, the total projects listed on the Freelancer.com website continues to accelerate.
Canaccord Genuity has a BUY recommendation.