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Upwork:Quarterly Results/2022 Q4: Difference between revisions
Upwork:Quarterly Results/2022 Q4 (view source)
Revision as of 08:26, 16 February 2023
, 16 February 2023→Key insights to look for
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Analysts expect 720Million or [[Upwork#Analyst Expectations|17%]] Revenue growth in 2023. --> Miss on Guidance. 690-705Million | Analysts expect 720Million or [[Upwork#Analyst Expectations|17%]] Revenue growth in 2023. --> Miss on Guidance. 690-705Million | ||
The company expects the revenue for Q1 to grow by 12% yer-over-year and revenue for 2023 to grow by 13% year-over-year. The company's revenue has never grown by less than 17% in the past. | The company expects the revenue for Q1 to grow by 12% yer-over-year and revenue for 2023 to grow by 13% year-over-year. Generally, the business is expected to be flat in 2023 due to macro headwinds.The company's revenue has never grown by less than 17% in the past.<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3 (page 15)</ref> | ||
|- | |- | ||
|New category [[Upwork Versus Deel Full-time hiring|full time hiring]]. | |New category [[Upwork Versus Deel Full-time hiring|full time hiring]]. | ||
|8 | |8 | ||
|Can they attack Deel? How large are expectations and the market potentail? | |Can they attack Deel? How large are expectations and the market potentail? | ||
Upwork's goal at the moment is to make its current clients to start hiring full-time. Additionally, they don't expect end-to-end full-time solutions to start being a tailwind to its business in 2023. The management noted that it's early to tell the impact of full-time hiring. However, past data indicates that their new offerings have always gotten strong reception. | Upwork's goal at the moment is to make its current clients to start hiring full-time. Additionally, they don't expect end-to-end full-time solutions to start being a tailwind to its business in 2023. The management noted that it's early to tell the impact of full-time hiring. However, past data indicates that their new offerings have always gotten strong reception.<ref name=":0">https://seekingalpha.com/article/4578775-upwork-inc-upwk-q4-2022-earnings-call-transcript</ref> | ||
|- | |- | ||
|Data: Revenue of last quarter | |Data: Revenue of last quarter | ||
|7 | |7 | ||
|How did the Revenue develop in the last quarter? How is the business going overall? | |How did the Revenue develop in the last quarter? How is the business going overall? | ||
Revenue for the fourth quarter grew by 18% versus 16% expected. | Revenue for the fourth quarter grew by 18% versus 16% expected<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 11)</ref>. | ||
|- | |- | ||
|CFO | |CFO | ||
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|6 | |6 | ||
|How are active clients developing? | |How are active clients developing? | ||
First time that the number of active clients declined sequentially. Active clients declined to 814,000 from 818,00 in Q3. The management attributes the decline to strong past quarters. | First time that the number of active clients declined sequentially. Active clients declined to 814,000 from 818,00 in Q3. The management attributes the decline to strong past quarters.<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 9)</ref> | ||
|- | |- | ||
|Internal Problems | |Internal Problems | ||
|6 | |6 | ||
|More signs of internal problems? | |More signs of internal problems? | ||
The company said that it addressed the sales issues seen in the second half of 2022. The company also reorganised the business to ensure accountability, ownership and independence of decisions. | The company said that it addressed the sales issues seen in the second half of 2022<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 4)</ref>. The company also reorganised the business to ensure accountability, ownership and independence of decisions<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 4)</ref>. | ||
|- | |- | ||
|Data: EPS | |Data: EPS | ||
|5 | |5 | ||
|How is EPS developing? Do they keep costs under control? (Note: A slight beat or miss does not matter a lot) | |How is EPS developing? Do they keep costs under control? (Note: A slight beat or miss does not matter a lot) | ||
Costs management is doing well. GAAP gross margin grew from 74% in Q3 to 75% in Q4. | Costs management is doing well. GAAP gross margin grew from 74% in Q3 to 75% in Q4<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3 (page 13)</ref>. | ||
|- | |- | ||
|Internal development and innovation | |Internal development and innovation | ||
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|5 | |5 | ||
|Are they finally able to strengthen their brand? | |Are they finally able to strengthen their brand? | ||
Brand marketing is paying off. Unaided awareness grew by 30%. Interestingly, unaided awareness among large businesses grew by 140%. Additionally, ad recall, which measures the impact of brand campaign messaging sequentially grew by 45% among large businesses. As a result, the company will reduce brand working media spend by approximately 12% in 2023 compared to 2022. | Brand marketing is paying off. Unaided awareness grew by 30%. Interestingly, unaided awareness among large businesses grew by 140%. Additionally, ad recall, which measures the impact of brand campaign messaging sequentially grew by 45% among large businesses. As a result, the company will reduce brand working media spend by approximately 12% in 2023 compared to 2022<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 3)</ref>. | ||
|- | |- | ||
|Data: Take rate | |Data: Take rate | ||
|5 | |5 | ||
|How is the take rate developing? A lower take rate (while having higher revenue) is better | |How is the take rate developing? A lower take rate (while having higher revenue) is better | ||
Take rate is growing. It grew from 15.4% in Q3 to 15.7% in Q4. | Take rate is growing. It grew from 15.4% in Q3 to 15.7% in Q4<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 10)</ref>. | ||
|- | |- | ||
|Data: Enterprise clients | |Data: Enterprise clients | ||
|4 | |4 | ||
|How are enterprise clients developing | |How are enterprise clients developing | ||
New enterprise clients declined by 19% year-over-year due to more pronounced sales cycles brought by macro headwind. However, enterprise revenue grew by 22% year-over-year to $12.8 million. | New enterprise clients declined by 19% year-over-year due to more pronounced sales cycles brought by macro headwind. However, enterprise revenue grew by 22% year-over-year to $12.8 million<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 12)</ref>. | ||
|- | |- | ||
|Transaction losses | |Transaction losses | ||
|4 | |4 | ||
|Is this problem solved? It stood at 6% [[Upwork:Quarterly Results/2022 Q3|last quarter]]. | |Is this problem solved? It stood at 6% [[Upwork:Quarterly Results/2022 Q3|last quarter]]. | ||
It seems the measures put in place to curb transaction losses are paying off. Transaction losses declined to 4% fro 6% in the third quarter. | It seems the measures put in place to curb transaction losses are paying off. Transaction losses declined to 4% fro 6% in the third quarter<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3<nowiki/>(page 13)</ref>. | ||
|- | |- | ||
|Impact of Ukraine war on its business | |Impact of Ukraine war on its business | ||
|3 | |3 | ||
|Any last effects to be seen from the Ukraine war? | |Any last effects to be seen from the Ukraine war? | ||
Ukraine war continues to be an headwind to the business. However, the management did not quantify Ukraine war impact on its Q4 results. | Ukraine war continues to be an headwind to the business. However, the management did not quantify Ukraine war impact on its Q4 results<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3 (page 9)</ref>. | ||
|- | |- | ||
|Impact of AI | |Impact of AI | ||
| | | | ||
|They are confident that AI will bring a huge gain to the platform. Hayden Brown said search for AI related services on the site grew by 3,900% in the last 4 months alone. Similarly, AI job posts grew by 1, 400% in the last couple of months. | |They are confident that AI will bring a huge gain to the platform. Hayden Brown said search for AI related services on the site grew by 3,900% in the last 4 months alone. Similarly, AI job posts grew by 1, 400% in the last couple of months<ref name=":0" />. | ||
|} | |} | ||