Slide 1: Upwork Q2 2024 Earnings
Upwork Q2 2024 Earnings © 2024 Upwork Inc. Proprietary and confidential. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation of Upwork Inc. (the “Company,” “we,” “us,” or “our”) contains "forward-looking" Undue reliance should not be placed on the forward-looking statements in this statements within the meaning of the federal securities laws. Forward-looking statements include prese
Slide 3: Top line growth with continued margin accretion
Top line growth with Q2’24 continued GSV Revenue GAAP Gross Margin margin $1.0B $193.1M 77% accretion -2.7% year-over-year +15% year-over-year +100 bps year-over-year Adjusted EBITDA Free Cash Flow Take Rate $40.8M $33.5M 19.2% 21% adjusted EBITDA margin 82% FCF/adjusted EBITDA +290 bps year-over-ye
Slide 4: Second quarter highlights
Second quarter highlights GSV from AI-related work up Net income of $22.2 million – 67% year-over-year in Q2 highest ever Completed $100M share repurchase Strong Free Cash Flow generation – program; purchased 2.9M shares in Q2 $33.5M in Q2 and 8.2M shares in 2024 Free cash flow is a non-GAAP measure
Slide 5: Advancing AI work + innovation
Advancing AI work + innovation Rise in AI work + adoption yielding 67% YoY increase in AI-related work GSV Freelancers working on AI-related work earned 47% more per hour than those working on non-AI-related work in Q2 Uma™, Freelancers on Upwork using AI tools Upwork’s and apps at 5x the rate of co
Slide 6: Ads & monetization momentum
Ads & monetization momentum Freelancer Plus Boosted Profiles Boosted Proposals Connects Purchases One of Upwork’s fastest-growing revenue streams 75% year-over-year revenue growth in ads & monetization products in Q2 Revenue from Connects grew 81% year-over-year in Q2 Ads & monetization products incl
Slide 7: Agility and strong foundations in Enterprise
Agility and strong Vendor Management foundations in Enterprise System Partners 46 new Enterprise logos in Q2, including Builders FirstSource, Guidepoint, and Labelbox 27 of 46 new logos signed via a new test offering in our Enterprise Solutions portfolio Welcomed Beeline, one of the largest and most
Slide 8: Second quarter revenue growth and focus on margin expansion
Second quarter revenue growth and focus on margin expansion Revenue Adjusted EBITDA $193.1M $40.8M $ Millions +15% $ Millions 21% YoY Margin $200 $40.0 $190.9 $193.1 $180 $183.9 $40.8 $30.0 $31.2 $33.3 $175.7 $30.5 $168.6 $160 $160.9 $20.0 $140 $14.4 $10.0 $120 $0.0 -$2.9 $100 Q1’23 Q2’23 Q3’23 Q4’2
Slide 9: Take rate achieved all-time high; Marketplace increased to 18%
Take rate achieved all-time high; Marketplace increased to 18% Take Rate Marketplace Take Rate Active Clients 19.2% 18.0% 868K +290 bps % Take Rate YoY % Take Rate +300 bps # in Thousands +6% YoY YoY 20% 20% 1,000 19.2% 18.9% 18.0% 872 868 17.2% 17.7% 836 851 17.1% 827 16.0% 16.3% 750 822 15.0% 15.0
Slide 10: Strong growth in Marketplace revenue
Strong growth in Marketplace revenue Marketplace Revenue Enterprise Revenue $166.8M $26.3M $ Millions $ Millions +17% +0.2% $200 YoY $30.0 YoY $166.8 $150 $164.3 $157.5 $26.4 $26.6 $26.3 $149.6 $26.3 $ 26.1 $142.3 $20.0 $24.2 $136.7 $100 $50 $10.0 $0 $0.0 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q1’23 Q2
Slide 11: Healthy balance sheet + strong cash flow
Healthy balance sheet + strong cash flow Shares Cash and cash equivalents Free Cash Flow Repurchased and marketable securities In the second quarter 2024 In the second quarter 2024 As of June 30, 2024 $33.5M 2.9M $497.7M Free Cash Flow is a non-GAAP measure and is presented for supplemental purposes
Slide 12: Full-year guidance
Full-year guidance Q3 2024 Guidance FY 2024 Guidance Revenue $179 million - $184 million $735 million - $745 million Adjusted EBITDA $36 million - $39 million $140 million - $150 million Diluted weighted-average 139 million - 141 million 139 million - 143 million shares outstanding Non-GAAP diluted
Slide 13: Appendix + Definitions
Appendix + Definitions © 2024 Upwork Inc. Proprietary and confidential. Do not distribute. 13
Slide 14: Condensed Consolidated Statements of Operations
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Revenue Marketplace (1) $ 166,786 $ 142,308 $ 331,116 $ 278,984 Enterprise (1) 26,343 26,303 52,950 50,485 Total revenue 193,129 168,611 38
Slide 15: Condensed Consolidated Statements of Operations (continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (In thousands, except for per share data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income (loss) per share: Basic $ 0.17 $ (0.03) $ 0.30 $ 0.10 Diluted $ 0.17 $ (0.03) $ 0.30 $ (0
Slide 16: Condensed Consolidated Balance Sheets
UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 182,803 $ 79,641 Marketable securities 314,941 470,457 Funds held in escrow, including funds in transit 218,656 212,387 Trade and client rece
Slide 17: Condensed Consolidated Balance Sheets (continued)
UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (In thousands) (Unaudited) June 30, 2024 December 31, 2023 Common stock 13 14 Additional paid-in capital 615,012 674,918 Accumulated other comprehensive income (loss) (529) 205 Accumulated deficit (253,400) (294,062) Total stockholders’ e
Slide 18: Condensed Consolidated Statements of Cash Flows
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 22,220 $ (3,991) $ 40,662 $ 13,176 Adjustments to reconcile net income (loss) to
Slide 19: Condensed Consolidated Statements of Cash Flows (continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (44,423) (97,991) (194,299) (254,119) Proceeds from ma
Slide 20: Condensed Consolidated Statements of Cash Flows (continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 CASH FLOWS FROM FINANCING ACTIVITIES: Changes in escrow funds payable (4,281) (1,766) 6,269 16,197 Proceeds from exercises of s
Slide 21: Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
UPWORK INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (In thousands, except for percentages) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income (loss) $ 22,220 $ (3,991) $ 40,662 $ 13,176 Add back (deduct): Stock-based compensation expe
Slide 22: Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (quarterly)
UPWORK INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (In thousands) (Unaudited) Three Months Ended September 30, June 30, 2024 March 31, 2024 December 31, 2023 June 30, 2023 March 31, 2023 2023 Net income (loss) $ 22,220 $ 18,442 $ 17,374 $ 16,337 $ (3,991) $ 17,167 Add back (dedu
Slide 23: Reconciliation of Operating Cash Flow to Free Cash Flow
UPWORK INC. RECONCILIATION OF CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cash provided by (used in) operating activities $ 37,290 $ 4,309 $ 42,946 $ (4,392) Less: purchases of
Slide 24: Key Definitions
Key Definitions Active Clients Enterprise Revenue We define an Active Client as a client that has had spend activity on our work We define Enterprise Revenue as revenue from our Enterprise offerings, marketplace during the 12 months preceding the date of measurement. including all client fees, subscript
Slide 25: 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 26: 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 27: 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, adjusted EBITDA