Upwork:Quarterly Results/2023 Q4
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Return to: Earnings Season:2023 Q4 | 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
Summary of the results
- Upwork’s Q4 revenue grew 14% y/y to $183.9 million, topping management's upper guidance of $180 million (+11.5%), adjusted EBITDA and Non-GAAP EPS of $30.5 million and $0.20 also execeeded upper management guidance of $28 million and $0.18, respectively.
- Upwork’s active clients grew by 5% y/y 851,000 while GSV was up 4% y/y to 1.072 billion (analysts’ estimate: $1.04 billion).
- Its take rate was up 150 bps y/y to 17.2% while its profit margin grew to 9% from -10% in the previous year.
- Upwork is guiding Q1 2024 revenue of $183-$188 million (+15.3% at the midpoint) and Non-GAAP EPS of $0.17-$0.19, both coming above analysts’ estimates of $181.63 million and $0.14, respectively.
See: Q4 2023 Earnings Presentation | Forum Discussions
Management Guidance and Analysts Estimate
Management Guidance
| Items | Q4 2023[1] | 2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Lower-point | Y/Y | mid-point | Y/Y | Upper Point | Y/Y | Lower-point | Y/Y | mid-point | Y/Y | Upper Point | ||
| Revenue | $175 million | 8.4% | $177.5 million | 10% | $180 million | 11.5% | $680 million | 10% | $682.5 million | 10.4% | $685 million | 10.8% |
| Adjusted EBITDA | $24 million | $26 million | $28 million | $67 million | $69 million | $71 million | ||||||
| Adjusted EBITDA Margin | 13.5% | 15.8% | ||||||||||
| Non-GAAP Diluted EPS | $0.16 | $0.17 | $0.18 | $0.47 | $0.48 million | $0.49 | ||||||
| Diluted weighted-average shares outstanding | 143 million | 144 million | 145 million | 141 million | 142 million | 143 million | ||||||
- Management expects to generate positive free cash flow going forward..
- It expects stock-based compensation to be less than $20 million in Q4 2023.
Analysts Estimate
Yahoo Finance
| Items | Q4 2023[2] | Y/Y | Q1 2024[3] | Y/Y |
|---|---|---|---|---|
| Revenue | $178.43 million | 10.5% | $181.63 million | 14.20% |
| Non-GAAP EPS | $0.17 | 325% | $0.14 | |
| GSV | $1.04 billion | 0.97% |
Seeking Alpha
| Items | Q4 2023[4] | Y/Y | Up revisions in the last 3 months | Down Revisions in the last 3 months | Q1 2024 | Y/Y |
|---|---|---|---|---|---|---|
| Revenue | $178.16 million | 10.36% | 1 | 2 | $181.66 million | 12.93% |
| Non-GAAP EPS | $0.17 | 334.65% | 1 | 1 | $0.13 |
Competitor earnings expectations and results
Fiverr
Management Guidance
| Q4 2023[5] | FY 2023[5] | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Items | Lower point | Y/Y | Midpoint | Y/Y | Upper Point | Y/Y | Lower point | Y/Y | Midpoint | Y/Y | Upper Point | Y/Y |
| Revenue | $88.1 million | 6.0% | $91.6 million | 10.2% | $95.1 million | 14.4% | $358 million | 6.1% | $361.5 million | 7.1% | $365 million | 8.2% |
| Adjusted EBITDA | $14.9 million | 58.5% | $15.9 million | 74.7% | $16.9 million | 85.7% | $58 million | 137.7% | $59 million | 141.8% | $60 million | 145.9% |
Analysts estimate
| Items | Q4 2023[6] | Y/Y | Q1 2024[7] | Y/Y | FY 2024 | Y/Y[7] |
|---|---|---|---|---|---|---|
| Revenue | $92.38 million | 11.1% | $97.4 million | 10.7% | $408.6 million | 12.7% |
| EPS | $0.52 | 100% | $0.48 | 33.3% | ||
| Active buyers | 4.16 million | -3.2% | ||||
| Take rate | 31.4% | 4.0% | ||||
| SPend per buyer | $276.79 | 5.6% |
Analysts Opinions
Stock picking in 2024 will be driven by individual fundamentals
- January 19, 2024: Goldman Sachs sees stock picking being driven by “idiosyncratic fundamentals” in 2024 instead of the “bifurcation” seen in 2023 where mega-cap stocks outperformed other groups[8].
Stabilising macro environment to aid freelance business
- January 19, 2024: Goldman Sachs sees continued re-acceleration of Fiverr's revenue in 2024 as macro environment stabilizes[9].
- January 8, 2023: Jefferies analyst expects Upwork’s EBITDA margin to grow as the macro environment recovers and business confidence improves They view Upwork as a small-cap recovery play with acceleration. They added that renewed business momentum should expand Upwork's multiple above its historical average.[10]
References
- ↑ https://investors.upwork.com/static-files/e7a891f7-011d-44a9-b5e0-817069a0f814#:~:text=Marketplace%20revenue%20for%20the%20third,%2C%20flat%2Dfee%20pricing%20structure.
- ↑ https://finance.yahoo.com/news/unlocking-q4-potential-upwork-upwk-141604459.html
- ↑ https://finance.yahoo.com/quote/UPWK/analysis?p=UPWK
- ↑ https://seekingalpha.com/symbol/UPWK/earnings/estimates?period=quarterly
- ↑ 5.0 5.1 Source: Fiver Q3 2023 shareholder letter
- ↑ https://nz.finance.yahoo.com/news/unveiling-fiverr-fvrr-q4-outlook-141551302.html
- ↑ 7.0 7.1 https://finance.yahoo.com/quote/FVRR/analysis
- ↑ https://thefly.com/landingPageNews.php?id=3846884&headline=FVRR-Fiverr-just-upgraded-at-Goldman-Sachs-heres-why&utm_source=https://thefly.com/news.php%3fsymbol=FVRR&utm_medium=referral&utm_campaign=referral_traffic
- ↑ https://thefly.com/landingPageNews.php?id=3846884&headline=FVRR-Fiverr-just-upgraded-at-Goldman-Sachs-heres-why&utm_source=https://thefly.com/news.php%3fsymbol=FVRR&utm_medium=referral&utm_campaign=referral_traffic
- ↑ https://thefly.com/landingPageNews.php?id=3846945&headline=UPWK-Upwork-price-target-raised-by--at-Goldman-Sachs-heres-why&utm_source=https://thefly.com/news.php%3fsymbol=UPWK&utm_medium=referral&utm_campaign=referral_traffic