6,294
edits
Upwork:Quarterly Results/2024 Q1: Difference between revisions
→Earnings Call Summary
| Line 1: | Line 1: | ||
== Earnings Call Summary == | == Earnings Call Summary == | ||
=== GSV, revenue and take rate === | === GSV, active clients, revenue and take rate === | ||
* Historically, addition of new clients has been of the most leading indicators of GSV growth. | * Historically, addition of new clients has been of the most leading indicators of GSV growth. | ||
| Line 11: | Line 11: | ||
* They added 20,000 new clients in Q1. | * They added 20,000 new clients in Q1. | ||
* '''"Excluding the impact to GSV growth rate from the pricing change, we estimate Q1 GSV growth would have been approximately 3% year-over-year. While GSV grew approximately 1% year-over-year, this included some temporary headwinds associated with the final transition to our simplified flat fee pricing structure, which occurred on January 1," CFO Erica Gessert said.''' | * '''"Excluding the impact to GSV growth rate from the pricing change, we estimate Q1 GSV growth would have been approximately 3% year-over-year. While GSV grew approximately 1% year-over-year, this included some temporary headwinds associated with the final transition to our simplified flat fee pricing structure, which occurred on January 1," CFO Erica Gessert said.''' | ||
* The 2% impact on GSV growth by the pricing change will impact them throughout the year. '''"We estimate that at about 2% of GSV growth and it impacts us in Q1 and throughout the year. From there, we'll lap that. And I think for all the reasons we've talked about expect to see GSV continue to step up."''' | |||
* They view the pricing changes as positive despite it causing some headwinds to the GSV. | * They view the pricing changes as positive despite it causing some headwinds to the GSV. | ||
* The said their marketplace take rate is still lower than that of the peers. '''"Even after these changes, our marketplace take rate at 17.7% remains one of the lowest in the industry, which means that we have the capacity to continue to develop targeted monetization opportunities on the platform that will bring value to our customers," CFO Erica Gessert said.''' | * The said their marketplace take rate is still lower than that of the peers. '''"Even after these changes, our marketplace take rate at 17.7% remains one of the lowest in the industry, which means that we have the capacity to continue to develop targeted monetization opportunities on the platform that will bring value to our customers," CFO Erica Gessert said.''' | ||
* '''They have seen some stabilization in terms of newer cohort spend in 2024.''' | |||
* GSV growth in 2024 and 2025 leading indicators include strong demand for the ads, nice strength in the enterprise business and client growth. Q1 client growth was already 5%, which to them is encouraging. | |||
* Their new clients do look like past clients (coming in and ramping spend) and they have been driven by sales and marketing spend they made in the past quarters. New experiences on the platform are also accelerating activation of new clients. | |||
* They continue to see good growth among SMBs and macro impact on large businesses is moderating. '''"More broadly, I think if any kind of underlying detail, I think we, like I said, I think we continue to see very good growth in kind of the small business side, very small business side of our platform. And some of the negative kind of impacts from large business from last year is moderating in the current environment." CFO Erica Gessert said.''' | |||
=== Products === | === Products === | ||
| Line 29: | Line 34: | ||
* UMA is being developed by its AI startup, Headroom which they acquired at the end of last year. | * UMA is being developed by its AI startup, Headroom which they acquired at the end of last year. | ||
* They saw a 50% y/y growth in AI services category in Q1. | * They saw a 50% y/y growth in AI services category in Q1. | ||
* Hayden said they still see opportunities to enhance value in Freelance Plus. "We added Upwork Chat Pro very recently and that has generated a lot of excitement, but we also see opportunities to continue to enhance value there and with other aspects of how we build memberships and membership value on our platform." " If you look at other marketplace models out there, companies like Airbnb, Instacart, others, see upwards of 25% of their revenue coming from ads and monetization, and we're nowhere near that today." | |||
* Over 70% of new customers are using the job post generator they launched last year. | |||
=== Outlook === | === Outlook === | ||
* They said they are committed to continuing growing operating leverage to 2025 and beyond. | * They said they are committed to continuing growing operating leverage to 2025 and beyond. "So I think that we can certainly continue to gain operating leverage, even in a relatively lower growth environment," CFO Erica Gessert said. | ||
* CFO Erica said they are now in a position to commit to hit 35% adjusted EBITDA margin in the next 5 years. | * CFO Erica said they are now in a position to commit to hit 35% adjusted EBITDA margin in the next 5 years. | ||
* As said last time, they expect y/y revenue growth to moderate in the second half as they lap pricing changes implemented in 2023. | * As said last time, they expect y/y revenue growth to moderate in the second half as they lap pricing changes implemented in 2023. | ||