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Upwork:Quarterly Results/2022 Q4: Difference between revisions
Upwork:Quarterly Results/2022 Q4 (view source)
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* Active Clients | * Active Clients | ||
* Enterprise Clients? | * Enterprise Clients? | ||
* Debt | |||
* Take rate | |||
==Expectations== | |||
===Management Guidance<ref>https://investors.upwork.com/static-files/b5ef19da-22d6-4701-a36b-aa86cb398a6b#:~:text=Our%20overall%20take%20rate%20in,quarter%20of%20the%20prior%20year.</ref>=== | |||
=== Management Guidance<ref>https://investors.upwork.com/static-files/b5ef19da-22d6-4701-a36b-aa86cb398a6b#:~:text=Our%20overall%20take%20rate%20in,quarter%20of%20the%20prior%20year.</ref> === | |||
The management is guiding for a deceleration in revenue growth rate from the third quarter 2022 (23.80%) to the fourth quarter 2022(16.06%) due to the softening of seasonal and macroeconomic conditions. Additionally, the fourth quarter revenue growth rate is expected to be lower year-over-year due to a strong quarter in 2021 as a result of Covid tailwinds. | The management is guiding for a deceleration in revenue growth rate from the third quarter 2022 (23.80%) to the fourth quarter 2022(16.06%) due to the softening of seasonal and macroeconomic conditions. Additionally, the fourth quarter revenue growth rate is expected to be lower year-over-year due to a strong quarter in 2021 as a result of Covid tailwinds. | ||
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|Upper Bound | |Upper Bound | ||
|Q4 2021 | | Q4 2021 | ||
|Mid-point y/y growth(%) | |Mid-point y/y growth(%) | ||
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=== Yahoo Finance analysts estimates<ref>https://finance.yahoo.com/quote/UPWK/analysis/</ref> === | ===Yahoo Finance analysts estimates<ref>https://finance.yahoo.com/quote/UPWK/analysis/</ref>=== | ||
Yahoo Finance analysts expect Upwork to beat its mid-point revenue guidance. However, they expect the company to miss its earnings guidance by 20%. According to Seeking Alpha, in the last two years, Upwork has beaten EPS estimate and revenue estimate 88% and 100% of the time, respectively<ref>https://seekingalpha.com/news/3935863-upwork-q4-2022-earnings-preview</ref>. | Yahoo Finance analysts expect Upwork to beat its mid-point revenue guidance. However, they expect the company to miss its earnings guidance by 20%. According to Seeking Alpha, in the last two years, Upwork has beaten EPS estimate and revenue estimate 88% and 100% of the time, respectively<ref>https://seekingalpha.com/news/3935863-upwork-q4-2022-earnings-preview</ref>. | ||
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== Recent developments == | ==Recent developments== | ||
=== February 13, 2023, Upwork Expands to Support Full-Time Hiring<ref>https://investors.upwork.com/news-releases/news-release-details/upwork-expands-support-full-time-hiring-further-unlocking-worlds</ref> === | ===February 13, 2023, Upwork Expands to Support Full-Time Hiring<ref>https://investors.upwork.com/news-releases/news-release-details/upwork-expands-support-full-time-hiring-further-unlocking-worlds</ref>=== | ||
Upwork has come up with end-to-end features aimed at facilitating finding, vetting, hiring, and paying full-time global talent. The company is likely following in the footsteps of Deel as summarized here:[[Upwork Versus Deel Full-time hiring]] | Upwork has come up with end-to-end features aimed at facilitating finding, vetting, hiring, and paying full-time global talent. The company is likely following in the footsteps of Deel as summarized here:[[Upwork Versus Deel Full-time hiring]] | ||
=== January 18, 2023, Upwork Unveils Most In-Demand Skills for Independent Professionals in 2023<ref>https://www.upwork.com/press/releases/upwork-unveils-most-in-demand-skills-for-independent-professionals-in-2023</ref>=== | ===January 18, 2023, Upwork Unveils Most In-Demand Skills for Independent Professionals in 2023<ref>https://www.upwork.com/press/releases/upwork-unveils-most-in-demand-skills-for-independent-professionals-in-2023</ref>=== | ||
*Upwork's study reveals that sales & business development (54%), data entry (47%), accounting (45%), and 3D animation (44%) are the skills that had the highest year-over-year growth rate in 2022 within their categories. | *Upwork's study reveals that sales & business development (54%), data entry (47%), accounting (45%), and 3D animation (44%) are the skills that had the highest year-over-year growth rate in 2022 within their categories. | ||
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*LinkedIn data indicates that US businesses are increasingly hiring contract workers as recession fears grow. Contract job positions posted on the platform between May and November 2022 rose by 26% compared to the same period in 2021. | *LinkedIn data indicates that US businesses are increasingly hiring contract workers as recession fears grow. Contract job positions posted on the platform between May and November 2022 rose by 26% compared to the same period in 2021. | ||
==Analysis of [[Jobs posted on Upwork Platform]] as at February 11, 2023 <ref>https://docs.google.com/spreadsheets/d/1HEX9PT_YXkz-eua9tR-FFx-s6gAr-7ZoTmbW8RbRqYE/edit#gid=1524496488</ref> == | ==Analysis of [[Jobs posted on Upwork Platform]] as at February 11, 2023 <ref>https://docs.google.com/spreadsheets/d/1HEX9PT_YXkz-eua9tR-FFx-s6gAr-7ZoTmbW8RbRqYE/edit#gid=1524496488</ref>== | ||
* Open jobs from clients with 1-9 previous hires expanded from 39,072 jobs on October 1 2022 to 46,465 on December 2023 marking an expansion of 18.9% in the quarter. It is standing at 43,512 (+11.3%) as of February 11. In the same period open jobs from clients with 10+ hires expanded from 66,113 to 77,931 (+17.8%) and is now standing at 71,535. (+8.2%). Open jobs from clients with no previous hires expanded from 58,183 to 79,010 (35.8%) and is now standing at 84,564. (+45%) | *Open jobs from clients with 1-9 previous hires expanded from 39,072 jobs on October 1 2022 to 46,465 on December 2023 marking an expansion of 18.9% in the quarter. It is standing at 43,512 (+11.3%) as of February 11. In the same period open jobs from clients with 10+ hires expanded from 66,113 to 77,931 (+17.8%) and is now standing at 71,535. (+8.2%). Open jobs from clients with no previous hires expanded from 58,183 to 79,010 (35.8%) and is now standing at 84,564. (+45%) | ||
* Jobs posted on Upwork platform holds steady. As of February 11, 2023, the number of jobs posted on the platform were 199, 612. That may not be the highest recorded which has been 204,769 open jobs on January 7 2023, but still considerably more than the 163,369 at the beginning of Q4 2022. | *Jobs posted on Upwork platform holds steady. As of February 11, 2023, the number of jobs posted on the platform were 199, 612. That may not be the highest recorded which has been 204,769 open jobs on January 7 2023, but still considerably more than the 163,369 at the beginning of Q4 2022. | ||
*Contract-to-hire jobs stood at 47,014 as of February 11, 2023. This is higher than the 31,527 recorded on November 19, 2022 (when we started tracking it). This shows that the full-time hiring features which were recently launched by the company is getting the attention of clients. | *Contract-to-hire jobs stood at 47,014 as of February 11, 2023. This is higher than the 31,527 recorded on November 19, 2022 (when we started tracking it). This shows that the full-time hiring features which were recently launched by the company is getting the attention of clients. | ||
*Number of jobs that have no hires(new clients) is growing. At the beginning of Q4 2022, it were 58,183. As of February 11, 2023 , it stood at 84,564. Also, they account for the largest number of jobs posted(when compared to 1-9 jobs posted and 10+ hires), around 40%. This may imply that the company's marketing is paying off. It could also mean that the new clients are not satisfied with the applicants and are taking long to hire. | *Number of jobs that have no hires(new clients) is growing. At the beginning of Q4 2022, it were 58,183. As of February 11, 2023 , it stood at 84,564. Also, they account for the largest number of jobs posted(when compared to 1-9 jobs posted and 10+ hires), around 40%. This may imply that the company's marketing is paying off. It could also mean that the new clients are not satisfied with the applicants and are taking long to hire. | ||
* The need for intermediate-skilled talent is growing rapidly. Number of intermediate jobs grew from 87,464 at the beginning of Q4 2022 to 109,069(+25%) as at February 11, 2023. This is followed by expert jobs, which grew from 54,895 at the beginning of Q4 to 65,716(+20%) as at February 11, 2023. Entry level jobs grew from 20,990 to 24,716(+18%) This may imply that high value clients are increasingly using the site. | *The need for intermediate-skilled talent is growing rapidly. Number of intermediate jobs grew from 87,464 at the beginning of Q4 2022 to 109,069(+25%) as at February 11, 2023. This is followed by expert jobs, which grew from 54,895 at the beginning of Q4 to 65,716(+20%) as at February 11, 2023. Entry level jobs grew from 20,990 to 24,716(+18%) This may imply that high value clients are increasingly using the site. | ||
*As usual, majority of Open Jobs are temporary jobs(those with project length of less than one month), accounting for around 40%. | * As usual, majority of Open Jobs are temporary jobs(those with project length of less than one month), accounting for around 40%. | ||
== Analyst Opinions == | ==Analyst Opinions== | ||
* On February 13, Piper Sandler analyst Matt Farrell kept an Overweight rating on Upwork but did not change the price target after the company announced it was venturing into full-time rating. The analyst said, "The product further solidifies the company's position as one of the leaders in the world's work marketplace, with no other major player in the space offering the end-to-end capabilities across the work gamut." He added that the new product unlocks a new total addressable market for the company<ref>https://thefly.com/landingPageNews.php?id=3661865&headline=UPWK-Upwork-expansion-opens-new-addressable-market-says-Piper-Sandler&utm_source=https://thefly.com/news.php%3fsymbol=UPWK&utm_medium=referral&utm_campaign=referral_traffic</ref>. | *On February 13, Piper Sandler analyst Matt Farrell kept an Overweight rating on Upwork but did not change the price target after the company announced it was venturing into full-time rating. The analyst said, "The product further solidifies the company's position as one of the leaders in the world's work marketplace, with no other major player in the space offering the end-to-end capabilities across the work gamut." He added that the new product unlocks a new total addressable market for the company<ref>https://thefly.com/landingPageNews.php?id=3661865&headline=UPWK-Upwork-expansion-opens-new-addressable-market-says-Piper-Sandler&utm_source=https://thefly.com/news.php%3fsymbol=UPWK&utm_medium=referral&utm_campaign=referral_traffic</ref>. | ||
* On January 6, Piper Sandler analyst Matt Farrell lowered Upwork's price target from $20 to $15 and kept overweight rating. He said, "While uncertainty still exists and we certainly aren't out of the woods, we feel the uncertainty is more of a 'known-known' relative to this time last year."<ref>https://thefly.com/landingPageNews.php?id=3640814&headline=UPWK-Upwork-price-target-lowered-to--from--at-Piper-Sandler</ref> | *On January 6, Piper Sandler analyst Matt Farrell lowered Upwork's price target from $20 to $15 and kept overweight rating. He said, "While uncertainty still exists and we certainly aren't out of the woods, we feel the uncertainty is more of a 'known-known' relative to this time last year."<ref>https://thefly.com/landingPageNews.php?id=3640814&headline=UPWK-Upwork-price-target-lowered-to--from--at-Piper-Sandler</ref> | ||
* On December 13, Citi analyst Ronald Josey initiated coverage of Upwork with a Neutral rating and $14 price target. His core thesis across the internet sector continues to revolve around growing engagement via newer products and services. He favors companies "that are leaders in their respective categories, are innovative, and deliver improving margins and profitability."<ref>https://thefly.com/landingPageNews.php?id=3632165&headline=UPWK-Upwork-initiated-with-a-Neutral-at-Citi</ref> | *On December 13, Citi analyst Ronald Josey initiated coverage of Upwork with a Neutral rating and $14 price target. His core thesis across the internet sector continues to revolve around growing engagement via newer products and services. He favors companies "that are leaders in their respective categories, are innovative, and deliver improving margins and profitability."<ref>https://thefly.com/landingPageNews.php?id=3632165&headline=UPWK-Upwork-initiated-with-a-Neutral-at-Citi</ref> | ||
== Opinions == | ==Opinions== | ||
Further Opinions e.g. from Seeking Alpha or Youtube. Including Source and main/ most important arguments. | Further Opinions e.g. from Seeking Alpha or Youtube. Including Source and main/ most important arguments. | ||
== Main Product Updates<ref>https://community.upwork.com/t5/Product-Release-Notes/bg-p/ProductUpdates</ref> == | ==Main Product Updates<ref>https://community.upwork.com/t5/Product-Release-Notes/bg-p/ProductUpdates</ref>== | ||
* On February 14, the company redesigned its client dashboard to enhance work management flow. | *On February 14, the company redesigned its client dashboard to enhance work management flow. | ||
* Added new generative AI job category in February 10. | *Added new generative AI job category in February 10. | ||
* Effective January 18, freelancers can buy unlimited connects. Prior, freelancers were limited to 200 connects while agencies were limited to 400 connects per month. | *Effective January 18, freelancers can buy unlimited connects. Prior, freelancers were limited to 200 connects while agencies were limited to 400 connects per month. | ||
* Starting January 17, freelancers and clients can start recording Zoom meetings right in Messages | *Starting January 17, freelancers and clients can start recording Zoom meetings right in Messages | ||
* The other product updates are mainly aimed at improving user experience. | *The other product updates are mainly aimed at improving user experience. | ||
== Steps checked == | ==Steps checked== | ||
=== Analyst Opinions === | ===Analyst Opinions=== | ||
* Checked for recent opinions of analysts covering Upwork. There is only one current analyst opinion covering Upwork's full-time hiring product. | *Checked for recent opinions of analysts covering Upwork. There is only one current analyst opinion covering Upwork's full-time hiring product. | ||
=== Inputs from Management === | ===Inputs from Management=== | ||
* Searched for CEO, CMO and CFO recent commentaries both in YouTube and Google. I couldn't find any. | *Searched for CEO, CMO and CFO recent commentaries both in YouTube and Google. I couldn't find any. | ||
=== Management Changes === | ===Management Changes=== | ||
* Searched for recent news on Upwork CFO. No mention of who will replace Jeff MCcomb. | *Searched for recent news on Upwork CFO. No mention of who will replace Jeff MCcomb. | ||
=== Advertising Success === | ===Advertising Success=== | ||
* I searched both Google and YouTube.I couldn't find anything indicating that Upwork brand marketing is seeing success. | * I searched both Google and YouTube.I couldn't find anything indicating that Upwork brand marketing is seeing success. | ||
=== Revenue and EPS expectations === | ===Revenue and EPS expectations=== | ||
* Looked up if Upwork is likely to beat its revenue and EPS expectations and the answer is yes. | *Looked up if Upwork is likely to beat its revenue and EPS expectations and the answer is yes. | ||
==Competitor Expectations and Results== | ==Competitor Expectations and Results== | ||
[[Fiverr:Quarterly Results/2022 Q4]]<references /> | [[Fiverr:Quarterly Results/2022 Q4]]<references /> | ||