Freelancer finds profit again as Loadshift and Escrow.com pick up the slack

Cost cuts return Freelancer to operating profit

Freelancer Limited (ASX:FLN) has returned to operating profit, but the quarter’s headline improvement came more from restraint than renewed demand. Operating expenses fell 11.0% to A$8.9 million in 3Q26, with employee costs down 17.5% and hosting costs down 9.6%, helping the group produce an operating profit of A$0.1 million after a A$0.3 million loss in the first half.

The result was achieved against a weaker revenue base. Group revenue declined 17.2% to A$11.1 million and gross profit fell 16.1% to A$9.6 million, while EBITDA dropped to A$0.7 million from A$1.4 million a year earlier. Freelancer said more than A$4 million of annualised savings had now been removed from the cost base. Cash stood at A$16.5 million at 30 September and the group remained debt-free, although cash fell A$1.4 million during the quarter as user obligations and net deposits declined.

Escrow.com and Loadshift carry group marketplace growth

Group gross marketplace value rose 13.0% to A$244.9 million, driven by Escrow.com and Loadshift rather than the flagship Freelancer marketplace. Escrow.com GMV increased 18.6% to A$216.9 million, or 28.0% in US dollar terms, with wholesale electronics contributing 12.8% of quarterly GMV after entering the category during FY26. Revenue slipped 2.4% in Australian dollars, partly reflecting weaker domain-market activity during the northern-hemisphere summer.

Loadshift delivered its best quarter on record, with revenue up 18.0% to A$1.1 million and GMV up 16.9% to A$8.9 million. Loads awarded increased 14.8% to 4,032, while the award rate improved to 29.9%. September set new monthly records for both revenue and GMV, and a A$0.3 million load awarded late in the month was still awaiting completion at quarter end.

Freelancer marketplace fixes have not yet restored demand

The core Freelancer business remains the unresolved part of the story. GMV fell 27.6% to A$19.1 million and revenue dropped 26.3% to A$6.8 million, with new employers, projects and paying employers down about 33% on 3Q25. The decline in revenue widened from 23.2% in 1H26, despite progress on the three operational issues identified at the half-year result. Those issues were login friction, platform instability linked to AI scraping and weaker payment acceptance.

Management said returning-employer login friction had been reduced, platform stability had improved and Google was indexing about 5 million pages, up from roughly 1.2 million at the start of the quarter. Organic search signups were averaging 37,000 a week, 25% above their trough but still 16% below 3Q25, while card acceptance had recovered from its earlier dip. The earlier marketplace security challenges had been identified in prior quarterly coverage, but the company now says the operational fixes have not yet translated into renewed customer demand.

There are some more encouraging lead indicators: average project size rose 25% to US$498, average bids increased to 63 and AI-related work reached 7.7% of project GMV. Freelancer also secured a new engagement under NASA’s NOIS3 program and continued work for the US National Institutes of Health, following the earlier NASA innovation contract reported in coverage of its FY25 result. Those enterprise activities have not yet translated into reported revenue, leaving the next test fairly clear: whether repaired access, search visibility and payments can bring users back.

FY26 priorities shift to conversion and sustained profitability

For the rest of FY26, management plans to keep costs under control while growing Escrow.com’s wholesale electronics vertical, improving Loadshift monetisation and using AI-powered search and matching to lift Freelancer conversion. The company expects the benefits of these initiatives to flow through as it exits FY26 and enters FY27, but the timing remains uncertain. The quarter demonstrates that profitability can be recovered while revenue is falling; it does not yet show that the underlying marketplace has recovered.