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Upwork:Quarterly Results/2023 Q2: Difference between revisions
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== Summary of earnings call == | == Summary of earnings call == | ||
You can find our brief summary of the earnings | You can find our brief summary of the earnings call in [https://www.mindmeister.com/app/map/2885176377?t=NZWNxayDl6 MindMap.] | ||
Here is a detailed summary of the earnings call<ref>https://seekingalpha.com/article/4623101-upwork-inc-upwk-q2-2023-earnings-call-transcript</ref>. | |||
=== Cost-saving measures === | === Cost-saving measures === | ||
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* One of their most important growth areas is generative AI(MR). | * One of their most important growth areas is generative AI(MR). | ||
* AI was the fastest-growing category in H1(MR). | * AI was the fastest-growing category in H1(MR). | ||
* Generative AI job posts grew 10x while searches grew 15x compared to Q4 2022(MR). | * Generative AI job posts grew 10x while searches grew 15x compared to Q4 2022(MR). But the numbers are based on a smaller base(Q&A). | ||
* OpenAI is using Upwork talent to support its innovation and growth, and this created an opportunity for Upwork to help its customers gain access to Upwork talent(MR). | * OpenAI is using Upwork talent to support its innovation and growth, and this created an opportunity for Upwork to help its customers gain access to Upwork talent(MR). | ||
* Clients are saying they need talent to implement the AI solutions and are willing to pay a '''premium for those talent'''(Q&A). | |||
* '''Wages for generative AI jobs are 50% more than other jobs in the marketplace'''(Q&A). | |||
* Generative AI category is not causing any negative impact on other job categories(Q&A). | |||
* Demand for generative AI talent is occuring across business sizes, small businesses, medium and large(Q&A). | |||
* GSV contribution by generative AI is small(Q&A). | |||
* Upwork is talking with other generative AI providers who have clients who need generative AI talent. | |||
=== Enterprise business === | === Enterprise business === | ||
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* '''Total revenue growth was primarily driven by pricing changes in April 2022 as well as monetization strategies related to connects and contract initiation fee introduced in the quarter'''(MR). | * '''Total revenue growth was primarily driven by pricing changes in April 2022 as well as monetization strategies related to connects and contract initiation fee introduced in the quarter'''(MR). | ||
* Operating expenses declined 4% in Q2 due to cost-saving measures initiated(MR). | * Operating expenses declined 4% in Q2 due to cost-saving measures initiated(MR). | ||
* '''Non-GAAP R&D expenses declined 24% y/y while sales and marketing, G&A and transaction losses declined significantly'''(MR). | * '''Non-GAAP R&D expenses declined 24% y/y while sales and marketing, G&A and transaction losses declined significantly'''(MR). | ||
* '''Raised revenue guidance due to the success of its simplified pricing structure and other monetization improvements(MR).''' | * '''Raised revenue guidance due to the success of its simplified pricing structure and other monetization improvements(MR).''' | ||
* Still plans to exit the year approaching 15% EBITDA margin(Q&A). | |||
* Q4 EBITDA margin tends to be higher than Q1 EBITDA margin(Q&A). | |||
* Making pretty good returns on their cash balances due to high interest rates(Q&A). | |||
=== Macro environment === | |||
* compared to Q1, they did not see any changes in terms of how clients are navigating the macro environment(Q&A). | |||
* Enterprise clients are still showing sales cycle elongation, some are cautious with the budget(Q&A). | |||
* '''Updated guidance does not contemplate any changes to the macro environment'''(Q&A). | |||
=== Sales and Marketing === | |||
* '''Their enterprise sales execution improved throughout the quarter'''(Q&A). | |||
* Their revenue per account manager was up 100% q/q while productivity in the land team was up 13% q/q, with only one month operating under the optimized model(Q&A). | |||
=== Clients and GSV insights === | |||
* Active clients grew 2% y/y to 822,000(MR). | |||
*'''Growth in active clients was driven by y/y increase in retained clients, partially offset by flat growth in new clients'''(MR). | |||
* '''Retained clients were up 4% y/y'''(Q&A''').''' | |||
* '''Client acquisition was down 1% sequentially'''(Q&A)'''.''' | |||
* Active client number is a trailing 12-month number(Q&A). | |||
* One of their enterprise clients moved to managed service contract in Q2; hence the two will grow in aggregate in Q3(Q&A). | |||
* '''Expects GSV to be pretty much steady during the remainder of the year due to lapping of strong quarters. But this does not contemplate the changes to the macro environments(Q&A).''' | |||
=== Pricing Change === | |||
* The change that they have rolled out has gone extremely smoothly so far(Q&A). | |||
* That is, they haven't notice any negative impact on clients of all sizes(Q&A). | |||
=== Internal changes === | |||
* Hayden Brown is excited about where they are after the internal changes they made in Q1(Q&A). | |||
* She said that the energy and enthusiasm in their current structure and leadership couldn't be better(Q&A). | |||
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