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Upwork: Summary of SEC Fillings: Difference between revisions
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Below is a summary of Upwork 2022 10-K SEC Filling<ref>https://investors.upwork.com/static-files/a3048866-0496-4d47-9bcf-29ed94f4564c</ref>. | Below is a summary of Upwork 2022 10-K SEC Filling<ref>https://investors.upwork.com/static-files/a3048866-0496-4d47-9bcf-29ed94f4564c</ref>. | ||
=== GSV, Clients and Freelancers === | === GSV, revenue, Clients and Freelancers === | ||
* The number of Sundays in a quarter/year affect the amount of GSV. | * The number of Sundays in a quarter/year affect the amount of GSV. | ||
* In 2022, approximately 26% of its GSV was generated from U.S talent. | |||
* U.S was the largest talent in each of 2022, 2021, and 2020, while talent in India and the Philippines remained its next largest talent geographies in all three years. | |||
* In 2022, approximately 68% of its GSV came from U.S clients versus approximately 67% in 2021 and 66% in 2020. | |||
* In 2022, clients in any other country did not account for more than 10% of its GSV. | |||
* '''Due to U.S GAAP, Upwork recognizes the entire GSV of managed services projects as managed services revenue as oppossed to recognizing only a certain percentage of the client spend that they receive, like in marketplace projects.''' | |||
* In 2022, marketplace revenue was 92% of total revenue while managed service revenue was 8% of total revenue. | |||
* In 2022, provision for transaction losses was approximately 4% of the revenue versus 1% of revenue in 2021. | |||
=== Strategy and Outlook === | |||
* Due to a significant surplus of talent compared to clients, '''Upwork focus is "on retaining client spend and acquiring new clients, as opposed to acquiring new talent and retaining existing talent."''' | |||
* Upwork expects cost of revenue to increase in absolute dollars in future periods due to "higher payment processing fees, personnel-related costs, and third-party hosting fees." | |||
* Upwork expects gross profit to increase in future periods but gross margin is expected to flactuate from period to period. | |||
* Research and development cost is expected to increase in absolute dollars in future periods but its ratio to total revenue is expected to vary from period to period. Similar to sales and marketing costs and general and administrative costs. | |||
=== Products === | |||
* Upwork Payroll is available to clients "when talent are classified as employees for engagements" in Upwork. | |||
=== Technology === | === Technology === | ||
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* Upwork is licenced as an escrow agent by the California Department of Financial Protection and Innovation(DFPI). | * Upwork is licenced as an escrow agent by the California Department of Financial Protection and Innovation(DFPI). | ||
* Upwork is required to hold its user's escrowed and in-transit cash in trust as an asset. | |||
* '''Each Sunday, hourly payments to freelancers start being in-transit but Upwork won't have collected payments from clients. To satisfy escrow requirements, Upwork funds the shortage in trust with its own cash and collect the payments from clients in the next several days.''' | |||
=== Employees === | === Employees === | ||
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=== Competition === | === Competition === | ||
Other than online freelance companiea such as Fiverr, Upwork faces competition from services providers described below; | |||
* The key benefits of hiring freelancers instead of using traditional staffing models include talent quality, speed to hire, flexibility, and cost effectiveness. | |||
* Other than online freelance companiea such as Fiverr, Upwork faces competition from services providers described below; | |||
==== Traditional Staffing Agencies ==== | ==== Traditional Staffing Agencies ==== | ||
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* Upwork believes that its cash and cash equivalents, marketable securities and cash flow from operations will be sufficient for at least the next 12 months to meet to meet its requirements. | * Upwork believes that its cash and cash equivalents, marketable securities and cash flow from operations will be sufficient for at least the next 12 months to meet to meet its requirements. | ||
* Upwork do not make investments for trading or speculative purposes. | |||
* As of December 31, 2022, Upwork had $129.4 million in cash and cash equivalents versus $187.2 million as of December 31, 2021. | |||
=== Foreign Currency Risk === | === Foreign Currency Risk === | ||
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* Some of their other marketing tools include direct mail, TV, digital, audio advertising compaigns and event marketing programs. | * Some of their other marketing tools include direct mail, TV, digital, audio advertising compaigns and event marketing programs. | ||
* They have also increased their focus on large enterprise firms through account-based marketing programs. | * They have also increased their focus on large enterprise firms through account-based marketing programs. | ||
=== Platform security === | |||
* Upwork uses pattern-matching algorithms to detect suspicious activity in the platform. | |||
* User verifications is done by third parties. | |||
* Sensitive information shared among users is encrypted using secure socket layer technology. Also leverages HTTP strict transport security to boost security of its users. | |||
* Users can also choose to secure their credentials through two-factor authentication on a second device. | |||
* Upwork is Payment Card Industry Data Security Standard certified. | |||
=== Scalability of the platform === | |||
* '''Upwork cloud is designed be elastic''' i.e it automatically expands with increased usage in order to support sudden traffic spikes. It also autamatically reduces in size when the traffic goes down; hence saving on costs. | |||
== 2018 IPO SEC Filling == | == 2018 IPO SEC Filling == | ||