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Upwork:Quarterly Results/2024 Q1: Difference between revisions
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Return to: [[Upwork:Quarterly Results/2023 Q4]] | [[Earnings Season:2023 Q4]] | [[Upwork:Quarterly Results/2023 Q3|Upwork:Quarterly Results/2023 Q23]] | [[Upwork:Quarterly Results/2023 Q2]] | [[Upwork:Quarterly Results/2023 Q1]] | |||
See also: [[Upwork: Main Insights from Jobs Posted in Upwork Platform]] | [[Upwork: Product Developments]] | [[Upwork: Conferences]] | |||
== Earnings Call Summary == | == Earnings Call Summary == | ||
Video: [https://edge.media-server.com/mmc/p/5hfesr3u/ Upwork Q1 2024 Earnings Conference Call] | Transcript: [https://seekingalpha.com/article/4688283-upwork-inc-upwk-q1-2024-earnings-call-transcript Upwork Q1 2024 Earnings Conference Call] | |||
=== GSV, active clients, revenue and take rate === | === GSV, active clients, revenue and take rate === | ||
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* 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.''' | * '''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. | * 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. '''"And client growth, I mean, things are going really nicely with our client acquisition engine as we've kind of emphasized a few times on the call. Both activations and reactivations are doing nicely. So we do expect client growth to continue each quarter through the year," Erica Gessert noted.''' | ||
* 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. | * 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.''' | * 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.''' | ||
* Hayden said they are going to continue to make more progress around take rate by creating more value to customers. '''" And I think examples of that span everything from enhancing memberships on the platform to continuing to price connects more accurately to continue to bring in revenue from new streams like our partnership program. So there's really a lot of runway here. And I think, again, our goal is going to be governed around enhancing our take rate, but doing so in a way that really is creating more value for customers and getting them to spend more overall with us, which is really the ultimate goal."''' | |||
* '''They do not expect take rate to have a big step up as seen in Q1. But they expect ads and monetization to aid in continued advancement of the take rate.''' | |||
* Gessert noted that activation of lots of new clients is a drag on GSB for Active Clients. | |||
* '''Gesert also noted that spend by retained clients has started to stabilize compared to what they saw last year.''' | |||
=== AI === | |||
* Upwork is developing UMA (Upwork Mindful AI), a large language model that uses trillions of Upwork data to best match freelancers and clients faster. | |||
* UMA's capabilities is used by the likes of Best Match Insights, Upwork's Job Post Generator, Proposal Tips and Upwork Chat Pro. | |||
* UMA has started rolling out in Upwork's homepage and first tests on it are positive. "Clients who used Uma started spending on Upwork in their first month at a 7% higher rate than non-users," Hayden Brown noted. | |||
* 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 indicated that data shows 9% of internal employees are using AI compared with 20% of freelancers and 50% of Upwork talent. | |||
* Hayden signaled that clients are turning to Upwork to find AI talent. | |||
* '''Hayden said wages for AI jobs are still higher than for regular jobs though not as strong as in the past three or four quarters.''' | |||
=== Products === | === Products === | ||
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* They are rapidly expanding the workforce management system, bringing in Workday, VNDLY and KellyOCG as enterprise suite partners. | * They are rapidly expanding the workforce management system, bringing in Workday, VNDLY and KellyOCG as enterprise suite partners. | ||
* They have launched Upwork Updates which will be used to update customers of new offerings and products in the marketplace. | * They have launched Upwork Updates which will be used to update customers of new offerings and products in the marketplace. | ||
* 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." | * 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. | * Over 70% of new customers are using the job post generator they launched last year. | ||
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* The completed the purchase of $100 million shares this month. '''"In the first quarter, we repurchased approximately 5.2 million shares and as of April 23rd we have completed the entire $100 million repurchase program, repurchasing approximately 8.1 million shares. "''' | * The completed the purchase of $100 million shares this month. '''"In the first quarter, we repurchased approximately 5.2 million shares and as of April 23rd we have completed the entire $100 million repurchase program, repurchasing approximately 8.1 million shares. "''' | ||
== References == | |||