Slide 1: Upwork Q1 2024 Earnings
Upwork Q1 2024 Earnings
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation of Upwork Inc. (the “Company,” “we,” “us,” or “our”) contains "forward-looking" statements within the meaning of the federal securities laws. Forward-looking statements include all statements other than statements of historical fact, including any statements r
Slide 3: Strong top line growth and margin accretion
Strong top line growth Q1’24 and margin GSV Revenue GAAP Gross Margin accretion $1.0B $190.9M 77% +1% year-over-year +19% year-over-year +200 bps year-over-year Adjusted EBITDA Adjusted Free Cash Flow Take Rate $33.3M $15.5M 18.9% 17% Adjusted +290 bps EBITDA Margin year-over-year “GSV,” “Adjusted E
Slide 4: Raising the bar in the first quarter
Raising the bar in the first quarter AI & Machine Learning category Raising revenue and adjusted GSV grew 50% year-over-year EBITDA outlook for 2024 Repurchased Establishing long-term adjusted 5.2M shares in Q1 EBITDA margin target of 35%
Slide 5: Introducing Uma: Upwork's Mindful AI
Introducing Uma: Upwork’s Mindful AI Developed on top of industry-leading LLMs Customized with Upwork platform data Uma powers new features like Best Match, and improves existing features like Job Post Generator, Proposal Tips, and Upwork Chat Pro Conversational companion to help guide clients and f
Slide 6: Platform enhancements
Platform enhancements Portfolio Creator Upwork Coaching Services Upwork Coaching Services Personalized strategy calls and workshops help 24-34% of freelancers increase their earnings Portfolio Creator Upwork Coaching Services Improved portfolio provides an Get expert guidance. upgraded experience fo
Slide 7: Upwork Partner Experts
Upwork Upwork Partners Microsite Partner Experts https://www.upwork.com/partners/ Partners can offer their customers immediate direct access to a network of trusted, independent experts in their respective technologies
Slide 8: Onboarding key Enterprise partners and clients
Onboarding key Enterprise Vendor Management partners and clients System Partners 28 new logos in the first quarter, including Ansys, Unisys, and WPP Brought on Workday’s VNDLY as newest vendor management systems partner Introduced Kelly OCG as Upwork’s first MSP partner
Slide 9: Continued success in burgeoning ads business
Continued success in burgeoning ads Freelancer Plus Boosted Profiles Boosted Proposals business Freelancer Plus Over 100 thousand active subscriptions in Q1 Boosted Profiles Boosted Profiles deliver 4x more earnings on ad spend, making this a compelling solution for freelancers to get noticed and win w
Slide 10: Strong first quarter revenue and focus on margin expansion
Strong first quarter revenue and focus on margin expansion GSV Revenue Adjusted EBITDA $1.0B $190.9M $33.3M $ Millions $ Millions $ Millions +1% +19% 17% $1,250 $200 $40.0 Margin YoY YoY $1,072 $190.9 $1,030 $1,037 $1,030 $1,000 $1,003 $1,009 $180 $183.9 $30.0 $33.3 $31.2 $30.5 $175.7 $168.6 $750 $16
Slide 11: Take rate achieved all time high; acceleration in new client adds in Q1
Take rate achieved all time high; acceleration in new client adds in Q1 Take Rate Marketplace Take Rate Active Clients 18.9% 17.7% 872K +290 bps % Take Rate YoY % Take Rate +300 bps # in Thousands +5% YoY 1,000 YoY 20% 20% 18.9% 872 17.2% 17.7% 836 851 17.1% 827 16.0% 16.3% 750 814 822 15.0% 15.7% 1
Slide 12: Strong growth in Marketplace and Enterprise revenue
Strong growth in Marketplace and Enterprise revenue Marketplace Revenue Enterprise Revenue $164.3M $26.6M $ Millions $ Millions +20% +10% $200 YoY $30.0 YoY $150 $164.3 $157.5 $26.5 $26.4 $26.6 $149.6 $26.3 $ 26.1 $142.3 $20.0 $24.2 $136.7 $134.9 $100 $50 $10.0 $0 $0.0 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23
Slide 13: Healthy balance sheet and strong cash flow
Healthy balance sheet and strong cash flow Adjusted Shares Cash, cash equivalents Free Cash Flow Repurchased and marketable securities In the first quarter 2024 In the first quarter 2024 As of March 31, 2024 $15.5M 5.2M $490.6M Through April 23, 2024 8.1M Adjusted Free Cash Flow is a non-GAAP measure a
Slide 14: Raising full year guidance on top and bottom line
Raising full year guidance on top and bottom line Q2 2024 Guidance FY 2024 Guidance Revenue $190 million - $195 million $770 million - $782 million Adjusted EBITDA $32 million - $36 million $140 million - $150 million Diluted weighted-average 139 million - 141 million 140 million - 144 million share
Slide 15: Appendix + Definitions
Appendix + Definitions
Slide 16: Consolidated Statements of Operations
UPWORK INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) (Unaudited) Three Months Ended March 31, (In thousands) 2024 2023 Revenue Marketplace (1) $ 164,330 $ 136,676 Enterprise (1) 26,607 24,182 Total revenue 190,937 160,858 Cost of revenue 44,193 40,427 Gross pro
Slide 17: Consolidated Balance Sheets
UPWORK INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 24,667 $ 79,641 Marketable securities 465,939 470,457 Funds held in escrow, including funds in transit 222,937 212,387 Trade and client receivables, n
Slide 18: Consolidated Balance Sheets (continued)
Common stock 13 14 Treasury stock (2,138) — Additional paid-in capital 627,007 674,918 Accumulated other comprehensive income (loss) (386) 205 Accumulated deficit (275,620) (294,062) Total stockholders’ equity 348,876 381,075 Total liabilities and stockholders’ equity $ 1,000,819 $ 1,037,541
Slide 19: Consolidated Statements of Cash Flows
UPWORK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 18,442 $ 17,167 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Provision for transaction
Slide 20: Cash Flows from Financing Activities
CASH FLOWS FROM FINANCING ACTIVITIES: Changes in escrow funds payable 10,550 17,963 Proceeds from exercises of stock options 106 758 Repurchase of common stock (66,876) — Net cash paid for early extinguishment of debt — (170,752) Net cash used in financing activities (56,220) (152,031) NET CHANGE IN
Slide 21: 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 March 31, 2024 2023 Net income $ 18,442 $ 17,167 Add back (deduct): Stock-based compensation expense 16,942 19,900 Depreciation and amortization 3,146 2,024 (1)
Slide 22: Reconciliation of GAAP Net Income to Adjusted EBITDA
UPWORK INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (In thousands) (Unaudited) Three Months Ended March December 31, 2023 September 30, June March December 31, 2024 2023 30, 2023 31, 2023 31, 2022 Net income (loss) $ 18,442 $ 17,374 $ 16,337 $ (3,991) $ 17,167 $ (16,500) Add back (deduc
Slide 23: Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow
UPWORK INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended March 31, 2024 2023 Cash provided by (used in) operating activities $ 5,656 $ (8,701) Less: purchases of property, plant & equipment and cash outflows from inte
Slide 24: 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 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