Slide 1: Upwork Q4 & FY 2023 Earnings
Upwork Q4 & FY 2023 Earnings
Slide 2: Three key strategic pillars for 2024
Three key strategic Win key customer and work segments via specialization pillars for 2024 for 2024 Build the world’s most innovative work platform Establish a foundation for ongoing profitability growth over multiple years
Slide 3: Strong Q4'23 revenue growth & margin expansion
Strong Q4’23 revenue GSV Revenue Adjusted EBITDA growth & $1.1B $183.9M $30.5M margin +4% year-over year +14% year-over year 17% Adj EBITDA Margin expansion FY’23 GSV Revenue Adjusted EBITDA $4.1B $689.1M $73.1M +1% year-over year +11% year-over year 11% Adj EBITDA Margin “GSV” and “Adjusted EBITDA”
Slide 4: The fourth quarter capped a year of transformation and progress
The fourth quarter capped a year of transformation and progress Swift and successful pivot to Strong Active Client growth in profitability and cash generation H2 2023 Growing revenue streams including Acquired AI company Headroom rapid acceleration of our Ads + and welcomed founder Andrew Monetizatio
Slide 5: Transforming the customer experience with artificial intelligence
Transforming the customer experience with artificial intelligence Upwork Chat Pro Job Post Proposal Tips Generator Upwork Chat Pro Substantial interest; +150k sign ups and growing every day Included in the Freelancer Plus subscription beginning Feb 16th, 2024 Job Post Generator Clients using the Job
Slide 6: Making Upwork the preeminent destination for connecting AI talent and clients
Making Upwork the preeminent destination for connecting AI talent and clients AI Services Hub One-stop shop for all talent and client AI needs 70% growth in GSV in the AI & machine learning subcategory in Q4 +230% increase in visitors to the AI Services hub from H1’23 to H2’23
Slide 7: Marquee partnerships to empower AI-enabled independent professionals
Marquee partnerships to empower AI-enabled independent professionals
Slide 8: Improved integration with enterprise systems
Improved integration with enterprise systems In December 2023, we launched inaugural partnerships with major vendor management system (or VMS) platforms SAP Fieldglass and Flextrack VMS integrations make it easier for Enterprise customers to use Upwork Vendor Management System Partners Upwork attrac
Slide 9: Ads products accelerate and improve matching between talent and clients
Ads products accelerate and improve matching between talent and clients Availability Badges Boosted Profiles Boosted Proposals Availability Badges Freelancers with an Availability Badge received 55% more invites Invites sent to badged freelancers are accepted 77% more often Boosted Boosted Proposals
Slide 10: Introducing: Upwork Research Institute
Introducing: Empowering business decision makers Upwork Research Institute Launched on November 2nd, 2023, the Upwork Research Institute, is committed to studying fundamental shifts in the workforce Through our proprietary data, global survey research, partnerships, and academic collaborations, the
Slide 11: Strong fourth quarter results; substantial shift to profitability in H2'23
Strong fourth quarter results; substantial shift to profitability in H2’23 GSV Revenue Adjusted EBITDA $1.1B $183.9M $30.5M $ Millions +4% $ Millions $ Millions YoY +14% 17% $1,250 $200 $40.0 YoY Margin $1,072 $1,030 $1,037 $1,030 $1,000 $1,027 $1,003 $180 $183.9 $30.0 $31.2 $30.5 $175.7 $168.6 $750
Slide 12: Take rate achieved all time high; acceleration in new client adds in Q4
Take rate achieved all time high; acceleration in new client adds in Q4 Take Rate Marketplace Take Rate Active Clients 17.2% 15.9% 851K % Take Rate +150 bps % Take Rate +160 bps # in Thousands +5% YoY 20% YoY 1,000 YoY 20% 836 851 17.1% 17.2% 827 818 822 15.0% 16.0% 16.3% 15.0% 15.9% 750 814 15.7% 1
Slide 13: Sequential growth in both marketplace and enterprise revenue
Sequential growth in both marketplace and enterprise revenue Marketplace Revenue Enterprise Revenue $157.5M $26.4M $ Millions $ Millions $200 +17% $30.0 YoY $150 $157.5 $26.5 $26.4 $149.6 $26.3 $ 26.1 $26.0 $142.3 $20.0 $24.2 $136.7 $134.9 $100 $132.6 $50 $10.0 $0 $0.0 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23
Slide 14: Healthy balance sheet and strong cash flow
Healthy balance sheet and strong cash flow Adjusted Free Cash Flow Cash, cash equivalents and $ Millions marketable securities $48.3 As of December 31st, 2023 $550M FY’23 Adjusted Free Cash Flow $4.7 $48.3M FY’21 $(2.2) FY’22 FY’23 Adjusted Free Cash Flow is a non-GAAP measure and is presented for su
Slide 15: Guidance
Guidance Q1 2024 Guidance FY 2024 Guidance Revenue $183 million - $188 million $760 million - $780 million Adjusted EBITDA $28.0 million - $32.0 million $125.0 million - $135.0 million Diluted weighted-average shares 144 million - 146 million 148 million - 152 million outstanding Non-GAAP diluted EP
Slide 16: Appendix + Definitions
Appendix + Definitions
Slide 17: Consolidated Statements of Operations
UPWORK INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Revenue: Marketplace(1) $ 157,489 $ 134,939 $ 586,099 $ 518,282 Enterprise(1) 26,445 26,503 103,037 100,036 Tot
Slide 18: Condensed Consolidated Balance Sheets
UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, 2023 December 31, 2022 ASSETS Current assets Cash and cash equivalents $ 79,641 $ 129,384 Marketable securities 470,457 557,230 Funds held in escrow, including funds in transit 212,387 161,457 Trade and client
Slide 19: Balance Sheets: Stockholders' equity
Stockholders’ equity Common stock 14 13 Additional paid-in capital 674,918 592,900 Accumulated other comprehensive income (loss) 205 (3,085) Accumulated deficit (294,062) (340,949) Total stockholders’ equity 381,075 248,879 Total liabilities and stockholders’ equity $ 1,037,541 $ 1,080,245
Slide 20: Consolidated Statements of Cash Flows
UPWORK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 17,374 $ (16,500) $ 46,887 $ (89,885) Adjustments to reconcile net income (loss)
Slide 21: Cash Flows: investing and financing activities
Purchases of property and equipment (134) (355) (692) (1,248) Internal-use software and platform development costs (3,480) (2,325) (12,659) (7,485) Net cash provided by (used in) investing activities (63,435) (37,035) 88,270 (69,468) CASH FLOWS FROM FINANCING ACTIVITIES: Changes in escrow funds paya
Slide 22: Reconciliation of GAAP to Non-GAAP Results
UPWORK INC. RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except for percentages and share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ 17,374 $ (16,500) $ 46,887 $ (89,885) Add back (deduct): Stock-based compe
Slide 23: Reconciliation of GAAP Net Income to Adjusted EBITDA
UPWORK INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (In thousands) (Unaudited) Three Months Ended September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Net Income (loss) $ (24,827) $ (16,500) $ 17,167 $ (3,991) $ 16,337 $ 17,374 Add back
Slide 24: Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash Flow
UPWORK INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (In thousands) (Unaudited) Twelve Months Ended December 31, 2023 2022 2021 Cash provided by operating activities $ 27,221 $ 6,559 $ 10,836 Less: purchases of property, plant & equipment and cash outflows f
Slide 25: Key Definitions
Key Definitions Active Clients Enterprise Client We define an Active Client as a client that has had spend activity on our work We define an Enterprise Client as a client that has entered into a contract marketplace during the 12 months preceding the date of measurement. for its use of our Enterprise S
Slide 26: Key Definitions
Key Definitions Marketplace Revenue Marketplace revenue represents the majority of our revenue and is derived from our Marketplace offerings, which include all offerings other than our Enterprise offerings—Enterprise Solutions, previously referred to as Upwork Enterprise, and Managed Services. Marketpla
Slide 27: About Upwork
About Upwork About Upwork Disclosure Information Upwork is the world’s largest work marketplace that connects We use our Investor Relations website (investors.upwork.com), businesses with independent talent from across the globe. We our Blog (upwork.com/blog), our X handle serve everyone from one-pe
Slide 28: Safe Harbor Statement
Safe Harbor Statement This presentation of Upwork Inc. (the “Company,” “we,” “us,” or “our”) contains Undue reliance should not be placed on the forward-looking statements in this presentation. "forward-looking" statements within the meaning of the federal securities laws. These statements are based
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this presentation, including adjusted EBITDA and adjusted fre