Hipages : Amended Q4 FY22 Quarterly Activities Report & Appendix 4C

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ASX / Media Release 29 July 2022

Quarterly Activities Report & Appendix 4C

Amendments

hipages Group Holdings Limited (ASX:HPG) ("hipages Group" or "the Company") announces an amendment to the Quarterly Activities Report & Appendix 4C released on 28 July 2022.

The annexed amended Quarterly Activities Report & Appendix 4C contain the following changes:

• Quarterly Activities Report - the last line of the report has been amended to state: "As noted in Appendix 4C, the Company paid $0.2m in compensation to its CEO and executive director and fees to its non-executive directors during the quarter."
• Item 6 of the Appendix 4C - inserts the amount of $0.2m, being a payment of compensation to its CEO and executive director and fees to its non-executive directors during the quarter.

Other than as noted above, there are no other changes to the Quarterly Activities Report & Appendix 4C.

Ends

Authorised for release to the ASX by the Company Secretary.

Further Information

Investors	Media
Ryan Thompson	Jack Gordon
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[e-mail]	[e-mail]

About hipages Group

hipages Group creates effortless solutions that help tradies streamline and grow their business and delight their customers. It is the owner of Australia's largest online tradie marketplace and Software- as-a-Service (SaaS) provider, hipages, connecting tradies with residential and commercial consumers. The platform helps tradies grow their business by providing job leads from homeowners and organisations looking for qualified professionals, while enabling them to optimise their business. To date, over three million Australians have changed the way they find, hire and manage trusted tradies with hipages, ultimately providing more work to approximately 31,000 trade businesses subscribed to the platform. Also part of the hipages Group ecosystem is Tradiecore, workflow management software that eases the burden of everyday admin for tradie businesses, and Builderscrack, New Zealand's leading tradie marketplace. hipages Group also owns a 25 per cent stake in the market-leading property maintenance platform, Bricks & Agent.

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ASX / Media Release 28 July 2022

Q4 FY22 Quarterly Activities Report & Appendix 4C

Growth continues with marketplace balance returning

hipages Group Holdings Limited (ASX:HPG) ("hipages Group" or "the Company"), Australia and New Zealand's largest online tradie marketplace and Software-as-a-Service (SaaS) provider connecting tradies with residential and commercial consumers, today provides its quarterly cash flow and activities summary for the period ended 30 June 2022.

Q4 FY22 Highlights

• Total revenue up 9% on pcp to $15.8m, or 4% on LFL basis, with recurring revenue up 6% on pcp to $14.7m, or 5% on LFL basis
• Marketplace balance returning as tradies clear the post-COVID backlog of jobs, with tradie registrations up and job numbers and churn starting to normalise
• Subscription tradies return to quarter-on-quarter growth, up 11% on pcp to 34.6k1, with hipages Australia also increasing vs. pcp
• Strong ARPU2 growth continues, up 10% to $1,806 with hipages Australia up 16% to $1,904
• Sustained brand investment drives growth in key brand metrics and organic job volumes
• Efficient business model underpins positive free cash flow and sustained balance sheet strength with $13.2m cash and funds on deposit
• Uncertain macroeconomic environment expected to bring balance to marketplace as consumer demand cools, driving accelerated growth for hipages Group

Table 1: Key Financial and Operating Metrics
	Q4 FY223	Q4 FY213	pcp %4	LFL %5
Total Revenue ($m)	15.8	14.6	9%	4%
Recurring Revenue ($m)	14.7	13.9	6%	5%
Recurring revenue % total	93%	95%	-2pts	+2pts
MRR6 ($m)	5.5	5.2	4%	4%
Job volume (000s)	367	353	4%	-2%
Subscription tradies7 (000s)	34.6	31.2	11%	0.3%
ARPU2 ($)	1,806	1,640	10%	16%

1. Includes 3.3k New Zealand paying tradies acquired through the acquisition of Builderscrack.
2. Average Annual Revenue Per Unit (i.e. Tradie ARPU) is the annual operating revenue divided by the average of the opening and closing number of total hipages tradies and paying Builderscrack tradies for the period. hipages Group ARPU of $1,806 is the blended result of hipages' ARPU of $1,904 and Builderscrack's ARPU of $880 for Q4.
3. Unaudited financial information.
4. Includes Builderscrack acquired 8 December 2021.
5. Presented on a like-for-like basis with hipages Group preceding the acquisition of Builderscrack.
6. Monthly recurring revenue at June 2022 (inclusive of GST).
7. Includes tradies committed to a monthly subscription product from hipages and Builderscrack's paying tradies who generated at least one work invoice over the last 12 months.

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hipages CEO and Co-founderRoby Sharon-Zipsersaid: "In Q4 we saw a demand-driven imbalance in the marketplace which impacted our growth, as tradies were at full capacity while clearing the COVID backlog of jobs and unable to take on more work. As the backlog clears and consumer demand cools in an uncertain macroeconomic environment, we expect balance to return to the marketplace and drive accelerated growth for hipages Group, reflecting the significant value we provide our tradie customers. A more balanced marketplace also means a better experience for our consumers, with tradies able to claim and complete more jobs faster."

"For hipages Group to continue to grow in such a challenging environment, while generating positive free cash flow and closely managing our expenses, highlights the power and resilience of our business model. We will continue to invest in our products and technology and develop new expansionary services to enhance the customer experience and expand our addressable market."

Operational & Strategic Update

In Q4, the Company continued to invest in its brand on both sides of the marketplace. Consumer marketing activity in the quarter focused primarily on TV, including program integration with Space Invaders on Channel Nine resulting in total consumer awareness increasing to 60%, up 5% on the pcp. Tradie brand activity drove a strong 8% increase in total tradie awareness to 67%8.

The strength of the hipages brand continues to generate strong job volumes from unpaid channels, enabling the Company to focus its marketing efforts on tradie acquisition in Q4. Despite further reducing its paid search spend in the quarter, job volumes were 4% ahead of the pcp, with jobs from paid channels representing just 21% of total jobs (pcp: 26%) and 71% of jobs coming from repeat customers (pcp: 66%).

The operational integration of Builderscrack, New Zealand's leading tradie marketplace, into the hipages Group ecosystem has progressed as planned, with core systems now embedded. Builderscrack continues to deliver profitable growth and recently rolled out a new profile subscription product to its customer base.

Bricks and Agent, the property management technology company of which hipages Group owns 25%, continues to deliver strong growth. Since COVID-19 restrictions eased, Bricks and Agent has accelerated the rollout of its technology and now manages more than 170,000 properties on its platform.

Market analysis conducted with Publicis Sapient in Q4 again confirmed that hipages delivers the highest online lead generation ROI for tradies, delivering an average of $36 of revenue for every $1 invested9. This highlights the significant value of the platform for tradies.

1. hipages Group brand health tracker, July 2022
2. Publicis Sapient: Tradie Digital Lead Generation Competitive Landscape Analysis, June 2022

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hipages Group also rolled out new product features to enhance the experience for tradies and improve customer retention, including additional flexibility for tradies around pausing subscriptions. The rollout of enhanced functionality for Tradiecore, the Company's field service software platform, continued in Q4, with additional features such as scheduling launched during the quarter. The payments solution being developed with Stripe went live late in Q4, with tradie uptake expected to gradually increase throughout FY23.

Financial Update

In Q4, hipages Group was impacted by a demand-driven imbalance in the marketplace, as tradies were at full capacity while clearing the COVID backlog of jobs and unable to take on more work.

This impacted growth, with total revenue up by 9% vs. pcp, or 4% on a LFL basis. Recurring revenue grew by 6% vs. pcp to $14.7m or 5% on a LFL basis. As Chart 2 shows, MRR grew by 4% on pcp to $5.5m10 as tradies continue to join at higher average price points.

Chart 2: MRR

As Chart 3 shows, in Q4 subscription tradies returned to quarter-on-quarter growth as expected, with new tradie registrations remaining strong. Total subscription tradies increased by 11% on pcp to 34.6k, with hipages Australia up slightly on the pcp. After peaking in Q3 due to the impacts of COVID, tradie churn reduced in Q4 to its lowest point in FY22 and continues to trend towards more normalised levels. Cancellation requests due to tradies being too busy also returned to pre-COVID levels.

10 Includes $35k MRR contribution from Builderscrack.

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Chart 3: Subscription tradies

Chart 4 shows strong total tradie ARPU growth continued in Q4, increasing by 10% overall to $1,806 and by 16% to $1,904 for hipages in Australia. Yields continue to increase significantly as new tradies join at higher price points.

Chart 4: Total tradie ARPU

While the macroeconomic outlook remains uncertain, balance is returning to the marketplace and the business exited Q4 with good momentum, with all key metrics improving.

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